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How to control expenses in rising inflation? Know the 50:30:20 rule, this will stop expenses and also save

Highlights

Under this rule, 50 percent of the total income left after paying tax should be spent on essential works.
Calculate personal inflation rate for everyday expenses.
This rule is applicable when the inflation rate is at a normal rate of 2-5 per cent.

New Delhi. The common man is badly affected by the ever-increasing inflation as it is affecting both income and savings badly. Since we do not have control over inflation. In such a situation, it is necessary to save more by reducing the expenditure. With its help, we will be able to add better capital for the future. But the question is, how will this be possible? Because along with income, expenses are also fixed.

To overcome this problem, you can adopt the 50:30:20 rule. It may be that many people are not aware of this rule or they have heard about it for the first time. In the current era amidst rising inflation, this rule has become very important and it is very simple. Let us know in detail this method
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Also read- Living in metros becomes expensive, average rent in Mumbai increased by 29%

What is the 50:30:20 rule to deal with inflation?
In the era of rising inflation, it is necessary to strike a balance between income and expenses and this rule has been made keeping this in mind. Under this rule, 50 percent of the total income left after paying tax should be spent on essential works and 30 percent should be used for fulfilling your desires. At the same time, after this, save the remaining 20 percent. However, this rule is applicable when the inflation rate is at a normal rate of 2-5 per cent.

But the rate of inflation in the country is above 6 percent, so there will be a need to save more than 20 percent. For this some methods have to be adopted. Invest in these unnecessary expenses and saved money somewhere.

Reduce unnecessary expenses Minimize or control these non-essential expenses such as traveling, watching movies, eating and drinking in restaurants and going on tours. For this, you can check the credit card or bank statement, where you spend how much and how you can cut expenses.

Calculate personal inflation rate Compare daily expenses of the same type on two different days. There are many mobile apps and online tools available for this. With the help of these, you can easily calculate these expenses. By doing this you will be able to know the effect of inflation by comparing the expenses incurred today with that of the previous day. After this, try to see how to compensate for the increased expenditure.

Invest in schemes that give real returns Real returns are available only when you reduce the effect of inflation by saving. Bank FDs and such fixed income schemes will not give enough returns that can beat inflation. In such a situation, there will be a need to increase investment in mutual funds and it can be increased through SIP.

Tags: business news, inflation, Investment and return

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