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The 10-30-50 Rule guides youth to save 10 percent in their 20s, 30 percent in their 30s, and 50 percent in their 40s, balancing YOLO spending with future security
The 10-30-50 Rule helps balance YOLO spending and future savings. (Representative Image)
For today’s youth, saving money often comes with a dilemma. On one hand, there is the allure of the YOLO lifestyle – spending freely on concerts, trips, and online shopping. On the other, there is the growing pressure to secure the future. Questions like “How much should I save?” and “Where should I invest?” dominate discussions among young professionals.
Financial planners say the answer may lie in the 10-30-50 Rule of Saving, a simple framework that adjusts saving habits according to age and earning stage.
10-30-50 Rule Explained
Unlike rigid budgeting techniques, the 10-30-50 principle takes into account how priorities change across decades of life. The idea is not to compromise entirely on present-day pleasures but to cultivate a habit of saving in a structured way.
1. In Your 20s: With careers just beginning, saving large amounts can be tough. Experts recommend starting small, at least 10% of monthly income. If that feels difficult, even saving 1% consistently builds the habit. Here, discipline matters more than the figure.
2. In Your 30s: This stage usually brings bigger responsibilities such as housing, children’s education, or long-term family goals. Financial advisors suggest saving 30% of income, which lays the foundation for future security.
3. In Your 40s: Known as the “golden earning years”, this is typically when income peaks. The recommended target rises to 50% of earnings, which becomes crucial for retirement, children’s higher education, and wealth building.
The Psychology Of Saving
Many young professionals argue that saving even 10% feels impossible amid rising costs. But experts point out that savings can be automated, just as tax deductions are. Setting up an automatic transfer into a separate account on payday ensures that money is put away before it is spent.
The philosophy behind the 10-30-50 rule is balance. Financial experts stress that life should be enjoyed, but ignoring savings entirely can create long-term hardship. True financial freedom, they say, comes only when people learn to strike the middle ground between spending today and securing tomorrow.
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