Money Saving Tips: Often, people deposit their entire income into a single bank account and conduct all their transactions from that same account. EMIs are deducted, UPI payments are made via mobile, rent is paid, and excessive shopping also happens. When there’s no separate accounting for all these expenses, control over money gradually diminishes. You don’t even realize when necessary expenses turn into unnecessary habits.

Why does tracking money become difficult?

When salary, expenses, and investments all come from the same place, it becomes difficult to understand how much money went towards necessities and how much was spent unnecessarily. EMIs and daily expenses silently reduce savings. This is why many people, despite earning well, are unable to invest.

What is the 30-30-40 rule?

The 30-30-40 rule is a simple money management formula in which your income is divided into three parts. One part is allocated for daily expenses, another for EMIs and loans, and the third for savings and investments. Having three separate bank accounts is considered the most effective way to properly implement this rule.

Salary Account

The salary account is the account where only your monthly income is deposited. No direct expenses should be made from this account. At the beginning of the month, make only two transactions from here. The first transaction is to transfer the allocated amount for expenses and EMIs to the second account. The second transaction is to transfer money to the third account for savings and investments.

Expense Account

The expense account holds the portion of your income used for daily expenses and EMI payments. Rent, groceries, electricity, and water bills, online shopping, and UPI transactions should all be done from this account. Linking your debit and credit cards to this account also helps maintain better control over spending and reduces the possibility of overspending.

Investment Account

The sole purpose of an investment account is investment. It holds the portion of income that is meant to grow for the future. All investments, such as stocks, mutual fund SIPs, bonds, gold ETFs, FDs, and RDs, are made from this account. No expenses are incurred from this account, which strengthens the habit of investing and makes it easier to track returns in one place.

Major Advantages of Having Three Bank Accounts

Having three separate bank accounts ensures clarity on where your money is going. Investments become regular, and expenses automatically remain limited. This reduces mental stress and makes future planning more reliable. In the long run, this habit proves to be a strong step towards financial freedom.