The 50/30/20 Rule: How Smart Park MMF Can Elevate Your Budgeting Game April 15, 2025
Struggling to balance your income between expenses, savings, and investments? Without a plan, it’s easy to overspend on extravagant lifestyle choices and neglect long-term financial security. A well-structured and thought-out budget helps you meet all your needs, wants, savings, and debt repayment objectives. On the other hand, poor budgeting can deplete your savings and lead to financial strain. One effective strategy that helps to organise your expenses and promote financial stability is the 50/30/20 rule.
However, while this budgeting method highlights the importance of saving, global inflation, which is currently at 3.9%, can gradually erode your savings. This means that for every US$100 saved, your purchasing power decreases by US$3.90 annually. To combat this, incorporating Smart Park into your budgeting strategy can help maximize returns on your idle cash while keeping your finances secure.
What is the 50/30/20 Rule?
The 50/30/20 rule is an extensively used budgeting framework that involves dividing your income into three main categories: Needs, wants, savings/debt repayment. According to the rule, 50% of income must go towards fulfilling everyday needs, 30% towards wants, and the remaining 20% into savings.
50%(Needs): These are unavoidable expenses such as housing, food, transportation, essential utilities, insurance, childcare, and loan repayments.
30%(Wants): These are non-essential expenses that may enhance your lifestyle, for example, entertainment, dining out, holidays, shopping, and monthly subscriptions.
20%(Savings): The remaining 20% should be allocated towards building an emergency fund, investments and additional loan repayments.
Making the Most of Your 20% Savings Category
The 50-30-20 rule simplifies saving and spending by splitting a budget into three main categories. Savings, which take up 20%, are crucial for building a financial cushion. This portion emphasises both saving and investing, providing a safety net for emergencies like accidents or medical expenses. It also ensures you’re financially prepared to achieve long-term goals, such as a comfortable retirement, buying a home, or funding your child’s higher education.
Savings Trends Around the World
Personal savings remain a crucial component of economic activity, with savings rates varying significantly by country. These differences are influenced by cultural attitudes, government policies, and economic conditions. Here is an overview of personal savings rates across different countries:
| Country | Personal Savings Rate |
| United States | 4.8% |
| United Kingdom | 10% |
| South Korea | 35.2% |
| France | 17.9% |
| Switzerland | 14.9% |
| India | 28.3% |
| Singapore | 47.5% |
>h4>Why Returns Matter in Savings Allocation?
Although European countries tend to have higher personal saving rates compared to other regions, the habit of saving remains prevalent worldwide. The other trend that follows is the rising inflation rate. Argentina currently has an inflation rate of 237%, while China has a much lower rate of 0.5%. This contrast highlights the importance of ensuring that your savings are actively earning returns rather than simply sitting idle.
If your savings do not generate competitive returns, their real value declines over time, leaving you with reduced purchasing power. When you invest that money, you earn competitive returns that provide a hedge against inflation.
Balancing liquidity (easy access to funds) with returns (growing your savings) is essential to maximising the potential of your idle savings, to give you both security and growth for your future needs.
SMART Park MMF vs T-bills vs Fixed Deposit: A Brief Comparison
Investing is the best way to generate returns on your savings, fight inflation, and guarantee that your funds preserve their value or even expand. Here are the key popular instruments that you can invest your money in:
| Parameters | Smart Park MMF | T-bills | Fixed Deposit |
| Liquidity | Highly liquid | Highly liquid | Less liquid with penalties for early withdrawal |
| Risk | Low risk | Virtually risk-free | Low risk |
| Returns | Moderate returns | Moderate returns | Higher returns |
| Investment Period | Short-term | Short-term (91 days to 1 year) | Flexible (months to years) |
| Taxation | Subject to capital gains tax | Interest subject to income tax | Interest subject to income tax |
| Interest Rate | Variable | Fixed | Fixed |
| SMART Park (Money Market Fund (MMF)) | T-bills | Bank Fixed Deposit | |
| Underlying | Short-term, high-quality money market instruments and debt securities | Short-term Government Securities | Bank deposit |
| Lock-in period | No, can withdraw anytime | Yes, depending on the tenure | Yes, depending on the tenure |
| Risk | Low risk | Virtually risk-free | Low risk |
| Return | Returns (7 Day) Annualised as of 10 March 2025: – SGD 2.49 % p.a.* – USD 4.73 % p.a.* | Range from 2.36%p.a. – 2.95% p.a.^ | Range from 2.3%p.a. – 2.8%p.a. # |
*Based on the average rate of annualised returns over the last rolling week.Past performance is not necessarily indicative of future performance.^ https://www.mas.gov.sg/bonds-and-bills/treasury-bills-statistics# https://www.singsaver.com.sg/investment/blog/best-fixed-deposit-singapore
Conclusion: Elevate Your Budgeting with Smart Park MMF
The 50/30/20 rule helps you to be more disciplined and manage your money more effectively. While budgeting and saving are crucial, it’s also important to ensure your hard-earned money isn’t eroded by inflation. SMART Park is an excess funds facility that invests your cash into the Phillip Money Market Fund, providing a reliable way to grow your savings.
Not only will you earn a decent return, but you’ll also have access to your funds anytime, anywhere making it the perfect solution to grow your money.
Disclaimer
These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products.
Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance.
Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries.
The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries.
Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
About the author
Yee Xian
Digital Marketing Executive
Yee Xian graduated from Bachelor's Degree in Finance and Accountancy (Honours) and joined Phillip Securities in 2024. Since then, she had held Business Development roles across both Product and Sales Channels. She is passionate about finance and enjoys working with numbers. Yee Xian is currently with the Phillip Digital Channel which specialises in SMART Park (Excess Fund Management Facility), SMART Portfolio (Robo service), FinanceFit, and Phillip Protect.
The ‘Golden Goose’ of Investments: Boost Your Wealth with Smart Park! 
SMART Moves: How to Grow Your Funds Effortlessly with SMART Park 
Understanding Risk Tolerance: Are you an Aggressive or Conservative Investor? 
8 Benefits of Growing your Cash the SMART Way as a New Investor 
