Knowing how to save money sounds basic and easy. But you’d be surprised how many adults still struggle with it. No matter how much income one earns, keeping expenses under control is a skill to be honed.

So, how much should you save every month? It’s useful to have a budget plan in place to keep you focused.

Here are three popular budget plans you can try.

1. 50-30-20 rule lets you easily organise your budget

Harvard bankruptcy expert Elizabeth Warren and her daughter coined a budgeting strategy called the “50/30/20 rule”. Published in All Your Worth: The Ultimate Lifetime Money Plan in 2005, the rule is still popular today. The basic rule is to divide up disposable income and allocate it to spend: 50% on needs, 30% on wants, and 20% to savings.

How to calculate your take-home pay?

For Singaporean full-time employed workers, this means the 80% that gets credited into your bank account after CPF contributions. If you’re self-employed, you can take your pay amount minus business expenses, applicable taxes and any amount set aside for retirement.

Based on this amount, 50% goes to essential expenses such as groceries and transport. 30% goes to wants, which are things like branded bags, shoes, manicures, pedicures and fine dining. 20% should be saved or used to pay debt.

The great thing about the 50-30-20 rule is that it is easy to understand and apply. But the downside is that it’s not personalised. It’s just a simplified ratio that helps if you struggle with details. 

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2. Zero-based budgeting is detail-oriented for you to justify every dollar spent

While the 50-30-20 rule provides a great guideline and forces you to use at least 20% to save or pay debt, zero-based budgeting is more personalised and may enable you to save even more.

Originated from the business world where companies evaluate every single dollar of their budget, it has become trendy among the financial-savvy who want to save more.

Basically, you assign a function to every single dollar, which means you pay more attention to each expense. To do that, you add up all the outflows in a month, such as expenses, savings to be put aside, and debt repayment amounts. If you have more than one job or income stream, consolidate your total income together.

Then, all you need to do is to ensure that total income minus total outflows equals zero. As a result, your budget plan looks more detailed and you know where each dollar goes. If you have leftover in your plan, you assign it to a category — probably savings. If you have a negative amount, it means you need to lower your expenses until you achieve zero.

A zero-based budget may look like this for someone with a take-home pay of $3,000:-



Mortgage repayment 


Wi-Fi bill 


Electricity bill 


Phone bill 


Utilities bill 


Netflix subscription 








Insurance premiums


Student loan 




Total (Income) 



The plan requires you to track your expenses, either manually or with a budgeting app. It may not be suitable for people who are more big picture in nature and dislike dealing with too many details. But zero-based budgeting gives you a lot of control as you are clear where your money is going to.

A zoomed-in view of your expenses also shows you where you can streamline further. 

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3. Kakeibo Japanese budget plan is a journalling approach for budgeting

The Kakeibo method is a Japanese budget plan that was published in a magazine targeted at housewives in 1908. In Japan, housewives are typically the Chief Finance Officer and manage finances for the entire household.

How to save money? With the Kakeibo method, you go old school with pen and paper instead of using a budgeting app. There are 4 steps to the Kakeibo:

Step 1: Subtract fixed expenses from income.  

Subtract your fixed expenses from your take-home pay. These are monthly recurring expenses such as phone bills and mortgage that don’t really change.

Step 2: How much do you want to save? 

At this step, visualise what you want to achieve with your finances both short-term and long-term. Write down the purpose of your savings and how much you want to save every month. Then, subtract this amount from what’s left from step 1.

Step 3: How much money can you spend in a week?

After the fixed expenses are subtracted, divide the remaining amount by the number of weeks. You will then arrive at a fixed amount to spend during the week on things like transport, food, shopping, and so on. At this step, you can further categorise this into needs and wants if needed.

Step 4: How can you improve? 

The Kakeibo method also prescribes a monthly review and analysis, where you reflect and write down your thoughts on whether you reached your savings goals or whether you have spent too much. Is there any way to increase income or lower expenditure? Recording these thoughts will be a good reference for the following month.

As you can see, the Kakeibo method is the most taxing of the three budgeting plans. That’s because it’s not just a plan that prescribes a simple ratio or a multi-category allocation of money. It forces you to think through your finances by having a physical journal.


Financial discipline is a choice. If you already have a successful budget plan underway, continue the good work! Otherwise, if you are struggling with managing your expenses, try one of these popular budgeting methods and you will find your savings grow over time. 

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GoBear team

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