Spending Money

This Strategy of Saving and Spending Money will Help You


How much money should I spend and how much should I save? This question comes to the mind of all earning persons. We earn money especially for three things:

  1. Our needs
  2. Our hobbies or desires
  3. Savings and return of debts

Many times, people do not understand their needs, wants and savings and they spend their hard-earned money wrongly. Then neither they are able to save, nor fulfill their needs and hobbies. Those people always think that where is the money flowing? I earned a lot but I couldn’t save money? Understand some of the tips given by author Elizabeth Warren in a book All Your Worth: The Ultimate Lifetime Money Plan. If you honestly follow the tips given in the book, you will definitely be able to manage your needs, wants, and savings very well. According to the book, you should spend 50% of your income on your needs, 30% on your wants and 20% on your savings.


In Needs, you include those expenses which are very important for daily life, in the same way as water and food for the stomach. These will be the expenses without which you cannot live a peaceful life. For example:

  • House rent or EMI
  • Child’s school fees
  • Home ration
  • Electricity and telephone or mobile bills
  • Vehicle Fuel
  • Bus fare
  • Medicine costs, etc.

These expenses include things that have no alternative. You calculate your needs and try to bring them within the range of 50% of your monthly income. If you feel that it does not fall within the scope of 50%, then there is no harm in taking it up to 60%. But according to that, you have to reduce wants to 20%. But, you also have to keep in mind that in the future you do not have to break this rule. Even, if your salary or income is increased, you do not have to increase your needs above 50%.

Also Read: Can’t Retain Your Hard Earned Money? Follow these Steps


In wants, you can keep the expenses that are not necessary but you want to do to fulfill your desires. Such as:

  • Buying the new mobile
  • Buying clothes
  • Having food in expensive restaurants
  • Outstation visits
  • Home decoration, etc.

All these expenses are your wants, your desires. Try to keep these expenses within 30% of your income. If your income is 10000 rupees a month and you buy a mobile phone for 12000 rupees, then according to 30% you should save 3000 rupees for four months and then only you should buy a new phone. Remember, it makes sense to work with a percentage of Wants. It has been found that people who do not save much money even after handsome earning, their percentage of expending on wants touches 50%.


In this part, you have to put 20% of your income very much honestly. You have to understand that if you are cheating here, then you will be the only loser in the coming years and long term game. It is very important to be in this part with your honesty. Remember, it is difficult to count the spent money but it is easy to count the saved money. You should save 10% of your income in cash and you can invest the remaining 10% in shares, mutual funds or deposits, etc. But make sure that in any case you have to save 20% of your income.


If you earn well and can control yourself, then you can adopt these methods and easily manage your needs, wants and savings in your life. You have to just spend 50% on your basic needs, 30% on your desires and 20% on your saving plans.

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1 thought on “This Strategy of Saving and Spending Money will Help You

  1. Like!! I blog frequently and I really thank you for your content. The article has truly peaked my interest.

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