The key facts

  • The 50/30/20 model: 50% for necessities, 30% for pleasures, 20% for savings — is only a starting point, not a mandatory rule.
  • With a mortgage, children or unstable income, the share of spending on pleasures may drop to 10–15%.
  • Signs of excessive spending: savings are not growing, purchases on credit, inability to live two or three months without income.

How much can be spent on pleasures

Roughly about 30% of income can be allocated to entertainment, restaurants and other non-essential purchases, but the appropriate share depends on mandatory payments and the presence of savings. Asset manager, Candidate of Economic Sciences, lecturer at the Institute of International Economic Relations Irina Akhmadullina told Gazeta.Ru about this.

The 50/30/20 model as a starting point

According to Akhmadullina, the ability to save money depends not so much on the size of one's income as on the structure of mandatory expenses and financial discipline: one can earn 50 thousand rubles and be able to save, while another can earn 500 thousand and live paycheck to paycheck. As a starting point, she proposed the 50/30/20 model: half of the income for necessary expenses, 30% for non-essential purchases, 20% for savings and investments. At the same time, the expert emphasized that these proportions cannot be considered mandatory: with a mortgage, children or unstable earnings, the share of spending on pleasures may be 10–15%, while if there are no expensive debts, a reserve has been formed and capital is growing regularly, higher spending is also acceptable.

Examples of budget allocation

The economist gave examples: with an income of 50 thousand rubles and mandatory expenses of 30 thousand rubles, 10 thousand rubles each can be allocated to savings and non-essential purchases. With an income of 100 thousand rubles, the approximate allocation is 50 thousand for necessities, 20 thousand to savings and 30 thousand for pleasures.

Pitfalls and signs of excessive spending

The main pitfall, in Akhmadullina's opinion, is automatically raising one's consumption level following a salary increase: because of this, a person may earn much more but still never build capital. Excessive spending, in her words, is indicated by a lack of growth in savings, buying non-essential items on credit and the inability to live two or three months without income. At the same time, financial discipline, the expert noted, should not turn into a constant renunciation of joys; she advised first directing part of one's earnings to savings and then distributing the remaining money.