Budgeting Made Easy by 5-15-20-60 Rule

Have you been wondering how to budget your money? For years, I’ve been trying to train and teach myself on how to budget. I know that most of you struggles the same thing. Budgeting is hard when our favorite brands and products are waiving at us. Especially, if they are on sale. Our so-called budget disappears into thin air with a blink of an eye.

Where is my money? It’s gone! I still have many bills and loans to pay. Now I’m in despair. I’m now starting to worry. Where should I get money to pay for my bills and loans? You’ll then start staring at your ceiling, starting to argue and hate yourself for not being responsible enough in handling your own money. You can’t sleep. You’ll start to feel restless. You’ll pray to seek God’s help. Sometimes you cry in bed while praying for the solution. It sounds familiar, does it? I know you can relate. Once or more in your life you experience these things. Am I right?

I’ve read many articles about budgeting, but I always fail to learn it by heart. I came across an article by Vince Rapisura that teaches about this 5-15-20-60 rules.

This rule is very simple. It’s a no brainer. You need to keep 5% of your monthly income to buy for your insurance premium. 15% for savings, 20% to pay off your debts, and 60% for your living expenses.

This rule will help you prioritize your financial needs before budgeting for things that are not that important.

It is okay to spend on anything that you want if you securely have funds to pay for your insurance and accumulated savings.

Now let’s discuss each rule in detail:


In the late 1990’s most Filipino’s don’t see the importance of having an insurance, but as we evolve with technology, we can get any information we need on our fingertips and Financial Advisors can easily spread their message across any social media platforms. As many of us see different posts from Personal Finance Pages, we started to become curious on what insurance really is. We may find stories and testimonies from people who benefited from insurance, especially health and life insurances. Because of these, numbers of Filipinos are now aware how important and beneficial life and health insurance can be. The number of people buying for these premiums are growing as times goes by.

I know that you are also aware or have slightest idea on how important and helpful insurance can be. Keeping 5% of your monthly income to buy that insurance won’t hurt you.

15% for SAVINGS

Because of personal finance pages like USAPANG PISO, Peso Sense and more. Many Filipinos are inspired to start their own savings. As you scroll to your Facebook newsfeed, you’ll see many inspiring posts about savings challenge and how they were able to save a certain amount of money.

In this rule, it encourages us to save 15% of our monthly income to build our emergency funds, investment funds and more.

If you are planning to have an emergency funds, make sure to set aside 15% of your monthly income. Your goal here is to accumulate your 6 months’ worth of salary to build your emergency funds. It may be hard at first but as you continue and see the fruits of your labor, you’ll start to appreciate and become excited every time you set aside an amount for your savings.

20% for DEBT/LOANS

Banks, and other financing agencies are growing everywhere. Getting a loan is easier now. Thanks to technology! But beware for there are many financing agencies that exist not to help you but to burry you alive.

If you are someone who are not conscious about your financing and you haven’t discipline yourself in terms of handling and spending your money, having these easy access financial agencies can be very harmful to you. So be EXTRA CAREFUL.

However, if you are already in debt, setting aside 20% of your monthly income to pay for your debt is or will be the best decision you’ll ever make.

Is it okay to spend more if you don’t have any loans? Vince answer for that is yes and no. If you have no loans and have a passive income, then by all means… spend more. But if you have no loans and no passive income then no. You can’t afford to spend less.

If you really want to spend more money, you need to start creating a business or money-making machine that will give you a passive income.


In 5-15-20-60 rule you can’t find any mention of investments in it because it’s part of the 15% of your savings. Yes! You don’t save just for the sake of savings. You save to invest, to make more money. If you rely on the interest of your savings, you’ll never beat inflation. Banks provide less than 1% per year, however, inflation can increase not just per year but months as well. So, we must save to invest. But remember, study the risks for each investment first before jumping into it. Furthermore, don’t invest in something that you don’t understand.

60% for EXPENSES

All of us have different expenses but we must prioritize our needs over our wants. Not because our favorite brands or products are waiving at us, we’ll need to waive back at them. Remember, to prioritize and practice delayed gratification if you don’t want to suffer the consequences of your actions. If you can’t control yourself, you’ll start staring at your ceiling again feeling restless and hopeless.

I hate those feelings! If you hate those too, then be wise on handling and spending your money.

You see how simple this 5-15-20-60 rule is. Start learning this by heart and apply this everyday in your life so you’ll never be broke again. If you find this post helpful and inspiring, please don’t forget to share this article on your Facebook and other social media accounts. Thank you.


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