Implementing 50/30/20 budget rule with our earnings

Implementing 50/30/20 budget rule with our earnings

One fine evening, David was talking to his grandson who is just into teenage on the art of spending and saving money. David started explaining to his grandson how he used to save money during his youth days to stabilize the family financially. His grandson, Peter was always proud of what his grandfather has done for the family. He understands they are leading a happy life with the savings of his grandfather a couple of decades ago.

David said, “Hey Peter, I was one of the very few engineers in the city those days and as you know I had worked all my life in the State Irrigation Department as a project engineer working on dams and water-saving for the future. Saving in my life started at this point. Saving water is for our future, saving money is for your future. This thought changed my life. I used to implement the 50/30/20 budget rule with whatever I earned those days. Your father continues with this rule.”

Peter asked, “Can I too be successful as you with the 50/30/20 budget rule? Can you please explain?”

David Continued, “50/30/20 budget rule are the percentages that you should spend on Needs, Wants & Savings. It means that 50% of your income after tax should be spent on your essential needs, 30% of money needs to be spent on what you want to buy and 20% of the money should be spent of savings. I have just done this all my life.”

Peter said, “I understand that you always saved 20% of your income, but how did you save it. Can you please elaborate.”

David went on saying, “Now that you understand the 50/30/20 budget rule, you have asked a right question on how I have saved all my money through these years. I have invested in chits, which always gave me an instant facility to borrow as per my need. I just needed to inform the chit agency prior. These chits are now being called eChits that leverage the latest technology. Your dad saves with eChits as per the 50/30/20 budget rule. Remember you need to save before you spend.”

For more information, visit us at or write to us at