Budgeting your salary by using needs, wants and savings principle will be the best place to start. Let’s look at the percentage allocation and its categories
Needs
It should be 50% of your salary. Below are the categories for the same
- Rent
- Utilities
- Groceries
- Insurance – Health, Term, Car, Bike etc
- Kids education
Wants
It should be 30% of your salary
- Vacation
- OTT
- Restaurant
- Gadgets
- Luxury items
Savings
It should be 20% of your salary
- Stocks
- Mutual Fund
- Gold
- Emergency Fund
- NPS
- PPF
- Sukanya Samriddhi Yojana
The above list is not exhaustive. It depends based on person to person. It is always recommended to increase your savings from time to time.
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