4 Steps to divide money into a proportion of 50/30/20

Savings is not as hard as you think! All you need to do is study techniques in savings and apply those techniques to your daily life. If you would like to know an easy way to save money for salarymen, ACU PAY will present you with a saving formula!

Step 1: Clearly divide the money proportionately

Good saving formulae start with knowing how to divide the expenses

The first is to segment money from where it was received. The advantage of the explicit segmentation technique is that it makes it easier for us to manage money because we know which is for spending and which is for savings. Many people use this saving technique to start saving money easily and effectively.

The popular proportionality formula is “50-30-20”, which is divided into “daily expenses – personal expenses – savings money”. For example, the salary is 20,000 baht, divided the money into 3 parts as follows.

First part 50% = 10,000 baht
Second part 30% = 6,000 baht
Last part 20% = 4,000 baht

The first 50% is the largest portion of the necessary expenses. This first part is divided into expenses for daily life or expenses necessary for consumption. Examples of expenditures in this category include housing installments, car installments, utilities, water bills, electricity bills, telephone bills, food, travel, etc.

Step 2: Save money as much as you shop

Save your money at the same amount as you spend on shopping

The second part, 30%, is for savings. When working hard to earn money, you need to spend some money for your happiness, such as eating special meals, shopping, traveling, etc. Even if this proportion is used to reward yourself, you should carefully plan whether there is a need or not and not too frequent.

For example, it may be necessary to set the number of special meals not exceeding twice a month or to buy 1 new piece of clothing per month, etc., so that spending may not exceed the budget limit.

Step 3: Study investments

If there is cold money, it can be used to invest in various channels

The last 20% of the total monthly income is to save for themselves in the long term, such as SSF, and RMF, which have tax breaks and retirement savings and can be divided into savings. This type of savings is highly liquid for emergency purposes. It also has a low risk of losing the principal.

SSF stands for “Super Savings Fund” which can invest in all types of securities. There is no minimum purchase and no purchase continuity is required. However, there is a condition of not purchasing more than 30% of the total annual income, a total of 200,000 baht which started in 2020 to 2024. You can buy and hold it for 10 years, and you can also deduct it from taxes!

RMF stands for Retirement Mutual Fund. It is a fund that encourages Thai people to do long-term savings for retirement. This type of fund must be purchased annually with a minimum investment of 3% of each year or 5,000 baht and can be resold when investors are 55 years old or older.

These investments are only part of the savings formula. Don’t forget that all investments are risky. It is best to study or consult with experts or experienced persons to ensure each investment before it is made.

Step 4: Find a good tool to help manage your money

Monthly income-expenses apps or saving apps are interesting

Let’s conclude savings techniques by looking for helpers like a record of revenue and expenditure that are now available in applications that are free for download. There are a lot of apps that allow us to analyze and plan our spending on what parts of our expenditures should be reduced or cut down to make more money available for spending and saving.

From the tips on separating money to solve the aforementioned problem of insufficient funds, it seems that spending money is not difficult anymore, because proportional payouts will help us calculate future cost risks in advance.

References from
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