Budget Planner (50-30-20 Rule)
The 50-30-20 rule is the simplest framework for personal budgeting: 50% to needs (rent, groceries, EMIs), 30% to wants (dining, travel, entertainment), and 20% to savings and investments. Adjust the split to your situation or try the 70-20-10 rule for tighter budgets.
Frequently Asked Questions
What is the 50-30-20 budgeting rule?+
The 50-30-20 rule (popularized by Senator Elizabeth Warren) splits after-tax income into: 50% for needs (rent, EMIs, groceries, utilities, insurance), 30% for wants (dining out, travel, hobbies, subscriptions), and 20% for savings and debt repayment. It's a starting point — adjust based on your city, income, and goals.
What counts as "needs" vs "wants"?+
Needs are non-negotiable: rent/EMI, groceries, electricity, commute, health insurance, minimum loan payments. Wants are optional: Netflix, eating out, gym, vacations, new clothes. The grey area is your phone bill (need if essential for work, want if premium plan), or a car (need in some cities, want in others).
The 50-30-20 rule doesn't work in expensive cities — what should I do?+
In cities like Mumbai, Bangalore, or Delhi, housing alone can consume 30–40% of income. Consider the 70-20-10 rule (70% needs/housing, 20% wants, 10% savings) as a starting point. Alternatively, cut "wants" aggressively until you can increase savings above 15%. Housing cost is the highest-leverage variable to optimize.
How much should I save from each salary?+
Financial planners suggest saving at least 20% of take-home income. For retirement at 60, saving 20% from age 25 is generally sufficient. To retire earlier or build significant wealth, target 30–40%. The most important factor is starting early — even ₹3,000/month at 25 becomes ₹1+ Cr by 60 at 12% returns.