Salary
The 50-30-20 rule sounded boring until I saw it actually works
One rule. Three buckets. A creative way to manage money.
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Key insights
The 50-30-20 rule simplifies budgeting.
It offers flexibility, even for low or unpredictable incomes.
Budgeting helps reduce spending guilt.
This rule balances fun and finance.
It’s a great starting point for beginners.
Let me start by admitting: I used to think budgeting was for parents. Spreadsheets? Categorising my expenses? Monthly tracking? Hard pass.
I thought - If I need to account for one cup of coffee, I might as well stay broke, but in peace. Life was good for a while till I noticed a pattern - by the 20th of every month, I was calling my parents, “Dad, I need some money”
When I opened my banking app and saw ₹1,000 in my account, with rent due in 10 days, I felt disappointed.
That’s when I remembered something I once heard my dad say, but promptly ignored:
“Try the 50-30-20 rule. It’ll change your mindset towards money.”
So I did. And surprise - it worked.
So, what is the 50-30-20 rule?
In simple language, the 50-30-20 budget is:
- 50% of your income goes towards your needs (like rent, groceries, bills)
- 30% of your money towards wants (like brand sales and OTT subscriptions)
- 20% is purely for savings (investments, emergency savings, etc.)
A flexible, easy-to-follow budgeting rule, 50-30-20, is my kind of financial management.
How I made the 50-30-20 budget work
1. Automate the important stuff
First, I made a priority list which had my needs mentioned clearly. Set up auto-payments to ensure I never touch that money. Rent, electricity, EMIs… done. No mistakes, no stress.
2. Made peace with my “wants”
You know that guilt of buying an overpriced cup of coffee on my way to work? Not anymore. It’s built into my plan. I get 30% to enjoy life without guilt.
That freedom? Priceless.
3. Savings > spending
Now, despite following the 50-30-20 rule, slip-ups happened. To make sure I did not overspend across categories, I saved before I spent. The day my salary came in, I moved 20% towards savings.
Within 6 months, I had an emergency fund. And the best part? I felt more in control of my money.
Why the 50-30-20 rule works
When I first heard about the 50-30-20 budget, I assumed it wouldn't work for me. Why? With my paycheck, what was even there to save? Plus, the word “budget” never sparked joy. It felt like I was going to live a life of compromises.
But the 50-30-20 rule surprised me.
Once I started using it, I wasn’t just budgeting - I was living smarter and better.
Here’s what happened:
- I said yes to things that mattered without worry.
- I stopped fighting with myself over every expense.
- I started feeling less broke and more balanced.
- And I finally stopped living paycheck to paycheck.
Now, if like me, you’re also thinking, "I don’t earn a lot,” or “My income changes every month", I hear you.
The truth? The 50-30-20 rule is less about perfection and more about having a structure. For me, honestly, it was a starting point. Even if you shift the numbers a bit, it still gives you clarity. Budgeting isn’t about restriction. It’s about freedom with direction.
And that’s what the 50-30-20 rule gave me.
Basic budget, better finance
I never thought I’d say this, at least not out loud: Following the 50-30-20 rule is the best financial decision I’ve made in a long time.
- It gave me direction.
- It gave me space to enjoy.
- It gave me enough freedom and security to stop panicking every month-end.
So, if you’ve always found budgeting restrictive, maybe don’t start with a spreadsheet. Start with a 50-30-20 budget. It’s flexible, easy and honestly, pretty life changing.
Disclaimer: This article is intended solely for informational purposes. The views expressed in this article are personal. Axis Bank and/or the author shall not be liable for any direct or indirect loss or liability incurred by the reader arising from reliance on the content herein. Readers are advised to consult a qualified financial advisor before making any financial decisions. Axis Bank does not endorse or guarantee the accuracy of any third-party content or links included in this article.
By Axis Bank Learning Hub Team
