The 50/30/20 rule in Egyptian pounds, three tables for three income levels

The three parts, defined

• Needs: what the home cannot do without this month: housing, bills, basic food, the commute, medicine, school, and any instalment already running.
• Savings: what comes off at the start of the month for the emergency fund and your goals, before any other spending.
• Wants: anything that can be postponed or trimmed without harm: eating out, non-essential clothes, subscriptions, outings.

The method itself is walked through on a single salary of EGP 12,000 on the salary budget page. Here we compare three salaries and three ways of living. All three start from the idea in Lesson 2.2: Pay yourself first, and set your daily figure: fix the savings amount first, put real figures on the needs, and what is left is the budget for wants.

Example one: EGP 8,000, single, living with family

A hypothetical employee early in their career takes home EGP 8,000, lives with their family and contributes to the household.

The smallest salary of the three has the highest savings share, because needs are low: no rent, no children. Years like these rarely come twice. Someone who saves a quarter of their pay now builds an emergency fund, and money towards marriage, before the big commitments arrive.

Example two: EGP 18,000, a couple without children, renting

A hypothetical household with a net income of EGP 18,000 a month, paying rent.

Three quarters goes to needs, and rent alone is a third of the income. The popular rule would call this household over the line, but rent does not fall because you decide so halfway through a month. What this household can do now: never let savings drop below 10%, review the needs that move (shopping, transport) before touching wants, and bring the rent into the decision when the lease is renewed or they move.

Example three: EGP 40,000, a family with two children

A hypothetical family with a net income of EGP 40,000 a month and two children at school.

Look at the school line. The fees are paid once or twice a year, but here they are divided over twelve months and the amount is put aside every month. A family that skips this finds September the heaviest month of the year. At this income the risk is not in needs. It is in wants that grow with every raise without anyone deciding they should.

How to read your own table

Fill the same table with your actual figures, not the ones you wish you had, then look for three signals:

1. Needs above 70%: the answer is a large fixed line, such as rent or a running instalment, not your morning coffee. Plan for that line at the moment it can change.
2. Savings below 10%: raise them first, even by a small amount, and take the difference from wants.
3. Wants larger than savings in a household whose needs are under 60%: there is room to save more.

Then divide the wants budget by the days in the month to get a daily figure. EGP 2,700 in example two means EGP 90 a day, and a daily number is far easier to keep than one large monthly one.

Where Masareefy helps

In Masareefy you enter your income when you start, set the month's budget, and record bills and instalments as repeating payments. The app sets the month's commitments aside from day one and shows you each day what is safe to spend today once they are covered. To try the rule on your own income, use the 50/30/20 calculator.