When it comes to budgeting, how much should you allocate to each area? A simple rule of thumb which is easy to implement is the 50/30/20 rule. It is a rule coined by Harvard Bankruptcy expert Elizabeth Warren. This rule offers a big picture view of what your budget should look like before getting into the nitty gritty. So what does 50/30/20 stand for? 50% = Essential Expenses 30% = Lifestyle Expenses 20% = Financial Goals and Savings Spend at Most 50% of Your Income on Essential Expenses What do essential expenses include? They include household expenses i.e. groceries, utilities etc., transportation, personal and dependent expenses such as childcare, child education etc. It also includes home loan repayment if you own your house and stay in it. While these are expenses which are very critical to your family, they should not take up more than 50% of ......