What is the 70/20/10 Rule of Money? Smart Budgeting Guide for the UAE

Introduction
When it comes to managing personal finances, most people know they should save but the real challenge is deciding how much to spend, save, and invest. That’s where practical budgeting frameworks like the 70/20/10 rule of money come in. This rule provides a clear roadmap to balance living expenses, savings, and personal growth. For UAE residents, where living costs and opportunities are unique, it can be an especially useful guide.

What is the 70/20/10 Rule of Money?

The 70/20/10 rule divides your income into three categories:

70% – Living Expenses

Around 70% of your income should cover everyday living costs:

• Rent or mortgage
• Groceries and utilities
• Transportation
• Lifestyle expenses (entertainment, dining, subscriptions)

Keeping this portion under control helps ensure you’re living comfortably without overspending.

20% – Savings & Investments

The next 20% is dedicated to your financial future:

• Emergency fund contributions
• Retirement planning
• Investments (stocks, bonds, mutual funds)
• Debt repayment

This is the foundation of long-term financial stability.

10% – Giving or Personal Growth

This final 10% makes the rule unique:

• Charitable donations
• Supporting family
• Professional development (courses, certifications)
• Hobbies or passion projects

This portion brings purpose and growth beyond your basic needs.

Why the 70/20/10 Rule Works

• Simple & Practical – Easy to follow without complex spreadsheets.
• Balanced Living – Allows you to enjoy today while preparing for tomorrow.
• Adaptable – Fits different lifestyles, from young professionals to families.

70/20/10 vs. 50/30/20 Rule

You may have heard of the 50/30/20 rule, which splits income into Needs (50%), Wants (30%), and Savings (20%). Both work well, but the 70/20/10 rule sets aside money for giving and personal growth, making it more holistic for those who want balance in life.

Example: Applying the 70/20/10 Rule in the UAE

Let’s say you earn AED 15,000 per month in Dubai.

• 70% Living Expenses: AED 10,500 (rent, food, transport, lifestyle)
• 20% Savings/Investments: AED 3,000 (savings account, retirement fund, investments)
• 10% Growth/Giving: AED 1,500 (charity, courses, hobbies)

This breakdown works well for tax-free UAE salaries while managing higher living costs in cities like Dubai and Abu Dhabi.

How to Get Started

1. Track your expenses – Use the Deem Mobile App to monitor transactions.
2. Categorize spending into 70/20/10 buckets.
3. Stay flexible – Adjust as your income or goals change.
4. Focus on progress, not perfection.

Pro Tip: Set up automatic savings transfers with Deem Finance to ensure you always meet your 20%.

Final Thoughts

The 70/20/10 budgeting rule is not about restrictions — it’s about clarity and balance. By following this simple approach, you can:

• Enjoy your lifestyle today
• Build financial security for tomorrow
• Invest in what truly matters to you

At Deem Finance, we help you take control of your money with tools and solutions designed for the UAE market.

Ready to start budgeting smarter? Explore Deem Finance’s solutions and begin building your financial future today.

For Internal reference –

• Deem Credit Cards
• Deem Mobile App