If you are someone who finds it difficult to control spending habits and save enough for investments, then you should know about the 50/30/20 budget rule. By following this rule, you can significantly improve your personal finances.

Let’s understand this rule in simple terms. According to this rule, a person should allocate 50% of their income for basic necessities, 30% for wants or desires, and the remaining 20% for savings and investments.

This rule helps in setting a cap on each of these categories and ensures that you are capable of fulfilling your needs without compromising on savings and investments for the future. It also brings discipline to your financial management because you will already know how much to spend and how much to save.