Money Saving Tips for the Middle Class: In today’s times, inflation has shaken every household from the kitchen to the pocket. Especially, its direct effect is seen on the middle-class family. As soon as the month starts, the salary comes, and in no time, EMI, credit card bill, electricity-water expenses, children’s fees, and house rent together empty the pocket. Neither is there much roaming around, nor outside food, yet the account balance falls rapidly. This is the reason why everyone thinks about how to save and manage a budget on a low salary.
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What is the 40-30-20-10 rule?
The financial rule of 40-30-20-10 is very useful for making a home budget on a low salary. Suppose your monthly income is 30 thousand rupees. Out of this, keep aside 40 percent, i.e., 12 thousand rupees, for essential expenses. This includes expenses like house rent, electricity bill, children’s education, and household items. After this, keep 30 percent, i.e., 9 thousand rupees, for your entertainment, going out, watching movies, and eating and drinking. Now save 20 percent, i.e., 6 thousand rupees, as an emergency fund, so that it helps in difficult times. Invest the remaining 10 percent, i.e., 3 thousand rupees, in an investment (like SIP), so that you can get good returns in the long run.
Why is it important to track expenses
Often, people spend without tracking, and at the end of the month, they keep wondering where the money went. In such a situation, it is important to make a list of your needs at the beginning of every month. This will let you know on which things money is being spent unnecessarily and where to control it.
Be careful while shopping
Plan your shopping and go to the market only after making a list of essential items. Many times, people buy more items than they need due to the mall’s buy-one-get-two offer or discounts, which spoils the budget. Try to buy the necessary items from grocery stores or local markets, as things are available cheaper here. Also, you can take advantage of the offers available during festivals.
Avoid debt and loans
People with low salaries face the most problems when sudden expenses come up and they are forced to take a personal loan. But it is better to keep a distance from instant personal loan apps because they charge 40 to 50 percent annual interest. In such a situation, it is better to avoid them and keep an emergency fund ready.
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Proper planning will make the future secure
If you follow the 40-30-20-10 rule and stop unnecessary expenses, not only will the monthly budget be better, but savings and investments will also be possible. Gradually, you can get away from debt and money tension and create a secure financial future.