Getting that first paycheck is always special. However, like that popular line, with great powers, come great responsibilities. You may have planned great things to do and buy with that first salary of yours. But what about the second one, and all of the ones after that?

Importance of saving is a lesson that has been passed down from our earlier generations. However, when you are surrounded by internet charges, OTT subscriptions, and EMIs on your latest phone, it’s hard to spare some change for the future. But, for your bigger goals, emergencies, and financial freedom, budgeting is what will help you save big, however little at a time.

Getting into the habit of saving

The idea, in your young days, is to get into a habit. Remember the times when every single rupee added in the piggy bank took you a step closer to your ‘dream toy’? Why not treat your salary the same way? One of the best budgeting rules for that is the 50-30-20 budget rule.

The 50-30-20 rule requires you to allocate your income into three components, where 50% of your income will be allocated to your needs, 30% to your wants, and 20% to your savings.

Understanding the necessities

Allocate 50% to your necessities, such as groceries, daily commute to work, insurance premiums, healthcare expenses, house rent, and so on. These are the things that are absolutely necessary to maintain your life.

Defining what you want

The next 30% of your income will go to your ‘wants’. We all want to treat ourselves nicely once in a while. Watching movies, going out for dinners, saving for a luxury watch, or a new motorcycle that you want to buy. Entertainment needs like high-speed internet, and subscriptions to your favourite OTTs will also fall under this. 

Time to save

Last but not least, 20% of your income should be allocated to savings. Find out the investment instruments that are best suited for you. Based on your saving goals, you can invest in mutual funds, stock markets (long-term), or even gold. If you are not comfortable with investments or want to research before getting into them, a bank fixed deposit (FD) is the safest way to save your money. Long-term savings should help you plan your retirement better.

However, with your savings, make sure you have three to six months of your salary on hand to manage any unforeseen circumstances.

For more such updates and news on the go, follow us on