Meet Pooja! Pooja is a young professional and she has just joined a multinational firm as a software engineer. Once we were in conversation about our savings. Both of us are very ambitious for our careers. But Pooja is worried as she cannot save much from her salary. But it’s important girls!!


Mansi: Pooja, saving and investing every month is very important. You should sit for your monthly budgeting for at least 2 hours in month. 

Pooja: Hehe, I am not from a financial background. This monthly budgeting is not for me. I don’t even know 1% of it.

Mansi: You are not from a financial background, I agree. But you deal with money i.e. your finances every month, every day. You earn money to fulfil your basic needs and for your future, isn’t it? 

Pooja: Yes, correct. I have started earning to help my parents with household expenses. I am also planning to put my money in FD. 

Mansi: So, if we all earn money, then monthly budgeting is for everyone. For software engineers like you, doctors, lawyers, businesses, and also for the Chai Wala. 

Pooja: Hehe, even for Chai Wala? What do you exactly mean by monthly budgeting? Why it is important? 

Mansi: Do you know, as per LXME’s Women and Money Power Report 2022, 47% of Women do not invest anything and 80% of women do not even save at least 20% of their monthly income. 

Pooja: But, I struggle to manage my money. As soon as I receive my income I make all expenses like my bills, EMI, and rent, and then I am hardly left with anything. 

How to cut down expenses? 

How to calculate monthly expenses? So that you can save with discipline. 

How to manage monthly household expenses?

The simplest and shortest answer is Monthly BUDGET 

What is a Monthly Budget? 

It simply means planning for money coming into your pocket as income and money going out of your pocket as expenses or saving/ investment. To plan for overall expenses, you can prepare a family budget for a month, it is also known as household budgeting. 

How to set a Monthly Budget?

To prepare a family budget for a month and do household budgeting you can follow these steps. 

  1. Identify your monthly income and monthly expenses 
  2. Separate Needs and Wants 
  3. Design Your Budget
  4. Put Your Plan into Action
  5. Seasonal Expenses
  6. Stick to the Plan 

Does these steps difficult? But, believe me, it’s simple to follow these steps with the golden rule of budgeting which is the Rule of 50:30:20”

Let’s discuss this in detail. 

50:30:20 Budgeting Rule is the golden rule that helps you keep track of your expenses and maintain a budget. It guides you to divide your take-home pay into three categories: needs, wants, and savings &  investments. This way, you’ll have buckets for everything and be able to work within the limits of each bucket.

50% of your income: Needs

  • Allocate 50% of your total earned income towards your needs. 
  • Your needs include all your daily household expenses like groceries, electricity bill payments, medical payments, rent, EMI payments, and so on.
  • It basically includes all your essential and unavoidable expenses. 

30% of your income: Wants

  • From your total earned income, 30% can be used towards your wants. 
  • Your wants include all your aspirational expenses such as new gadgets, movie or dinner night, a small vacation or party with friends, and so on.
  • It typically includes expenses that are not essential but you desire to make. 

20% of your income: Savings and Investments

  • It is important to save at least 20% of your total earned income.
  • Managing your wants can help you save more than 20% of your money.
  • Once you save your income, invest it as per your financial goals. 

What do we popularly follow?

Whenever we receive income in the form of salary or any other form, we pay for all our expenses like EMI, Rent, School Fees, and Electricity bills, and we might also go to a party or for dinner. Lastly, if anything is left in our account, we will consider that as our savings. 

Is this the right way?

Nope Girl!! You can follow the LXME’s Pro-Tip.

LXME Pro-Tip

As soon as you receive your income, first save 20% of it and then spend it on your needs and wants.  It inculcates the habit of regular savings. 

So, The LXME Pro-Tip is

Income – Savings = Expenses 

How this tip can be beneficial?

Yes, and we will tell you why,

  • It creates a discipline around savings 
  • Paying yourself first ensures that savings are intact
  • Even Warren Buffet says “Do not save what is left after spending, but spend what is left after saving”

A budget helps keep track of your lifestyle inflation.

You CANNOT keep all your financial transactions in your head.

It’s important data girls!??‍♀️

So, What you can do?

You can check out the LXME’s Budget Planner. In this planner, you need to write

  • The money you make each month. Including primary income and secondary income (if any).
  • Write down all your Essential monthly expenses.
  • Housing ( Rent, Home Loan EMI, Home Insurance, Maintenance, Property Tax or any other housing-related expenses you are making)
  • Automobile/ Commute (Car Loan EMI, Fuel, Maintenance, Insurance. Taxes, Fine / Penalty, Cab Services, Public Transport)
  • Utilities (Electricity, Cooking Gas, Maid 1, Maid 2, Maid 3, Cook 1, Nanny for Child, Driver, and Others.)
  • Food (Monthly Groceries and Monthly Fruits & vegetables) 
  • Miscellaneous Expenses (Mobile Bills, Data Connection, School Fee, Online Learning, Medical Consultation, and Others like Salon/Fitness, etc)
  • Make a list of your INDULGENCE spend! (Means your Wants) 
  • Food (Eating Out or Ordering In)
  • Shopping( Amazon /Flipkart, Myntra/Jabong, Nykaa, or Others) 
  • Entertainment (OTT Subscriptions, Gadgets, or going out for movie)
  • Hobbies (Classes fees and Material charges)
  • Finally write down how much you manage to save and invest. 
  • How much did you save? (Cash in Bank Account, Cash in Hand, and Cash in e-wallets)
  • How much did you invest? (Fixed Deposits, Recurring Deposits, Mutual Funds, Gold, PPF, EPF, Bonds, Life Insurance Premiums, and Medical Insurance Premiums)
  • Then do the total. 

At the end write down Total Income, Total Spends on Essentials, Total Spends on Indulgences /Splurges, Total Investments, and Total Savings. 

Do a simple calculation, and write answers to 3 simple questions. That is – 

  1. Are your essentials spending account for 50% of your Income? 
  2. Are your indulgence spending 30% of your income?
  3. Are your savings 20% of your Income? 

Also, Girl!! It is okay if your percentages don’t match. It’s not important to match the exact same percentages. Rather, it’s important to save and invest at least 20% and you can always customize these percentages based on your financial situation. With budgeting and money management,slowly and steadily you will reach your goal. 

With this planner, 

Budget Like a boss, Girl!!

Click here to check it out: Budget Planner 

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