⚡ ₹1,800 unallocated - assign it to savings or a goal
Monthly allocation of ₹80,000
Needs
Wants
Savings
Needs: ₹50,700 (63%)
Wants: ₹14,500 (18%)
Savings: ₹13,000 (16%)
Unallocated: ₹1,800 (2%)
Needs (50%)
₹50,700
of ₹40,000 target
+₹10,700 over
Wants (30%)
₹14,500
of ₹24,000 target
₹9,500 under
Savings (20%)
₹13,000
of ₹16,000 target
₹3,000 under
Target for needs: ₹40,000/month (50% of income)Current: ₹50,700↑ ₹10,700 over
🏠Housing & Utilities
₹24,700
31% of income
₹
₹
₹
₹
🛒Food & Groceries
₹9,000
11% of income
₹
₹
🚌Transport
₹12,500
16% of income
₹
₹
₹
🏥Health & Insurance
₹4,500
6% of income
₹
₹
₹
Budget insights & recommendations
⚠️
Low savings rate (16%)
The 20% rule suggests saving ₹16,000/month. You're saving ₹13,000 (16%). Look for needs expenses you can reduce.
🏠
High needs spending (63%)
Your needs are above the 50% guideline. If rent/EMI is the driver, consider: roommates, refinancing your home loan, or shifting to a lower-cost area. Fixed costs above 55% leave little room for emergencies.
📊
Your savings projection
Saving ₹13,000/month: · FD at 7%: ₹9.36 L in 5 yrs · SIP at 12%: ₹30.20 L in 10 yrs · SIP at 12%: ₹129.89 L in 20 yrs
The 50/30/20 Rule — India's Most Practical Budgeting Framework
The 50/30/20 rule is the simplest budgeting framework that actually works for most Indian salaried employees. Divide your after-tax income into three buckets: 50% for needs, 30% for wants, and 20% for savings and debt repayment. No spreadsheet required, no tracking every ₹10 chai purchase.
The rule was popularised by US Senator Elizabeth Warren in her book All Your Worth, but it adapts surprisingly well to Indian incomes — with one important modification. In high-cost cities like Mumbai and Bengaluru, housing costs alone can consume 40–45% of income, making the strict 50% needs target challenging. In those cases, aim for 55% needs / 25% wants / 20% savings instead.
What counts as a need vs a want?
✓ Needs — required for living
Rent or home loan EMI
Basic groceries and vegetables
Electricity, water, gas
Essential transport (commute)
Basic health insurance & medicines
Term life insurance
Internet and one mobile plan
Children's school fees
✓ Wants — improves quality of life
Dining out and restaurants
Streaming subscriptions (Netflix, etc.)
Weekend trips and vacations
Branded clothing and accessories
Latest gadgets and electronics
Gym membership and hobby classes
Multiple mobile plans or premium plans
Entertainment and events
Indian salary budget examples — real numbers
Monthly in-hand
Needs (50%)
Wants (30%)
Savings (20%)
Annual savings
₹30,000
₹15,000
₹9,000
₹6,000
₹72,000
₹50,000
₹25,000
₹15,000
₹10,000
₹1.20 L
₹75,000
₹37,500
₹22,500
₹15,000
₹1.80 L
₹1,00,000
₹50,000
₹30,000
₹20,000
₹2.40 L
₹1,50,000
₹75,000
₹45,000
₹30,000
₹3.60 L
₹2,00,000
₹1,00,000
₹60,000
₹40,000
₹4.80 L
₹3,00,000
₹1,50,000
₹90,000
₹60,000
₹7.20 L
Why the 20% savings rule is non-negotiable
Saving 20% isn't just a guideline — it's the minimum for financial security in India. At ₹80,000/month in-hand with 20% savings (₹16,000/month), invested at 12% for 20 years, you accumulate ₹1.59 crore. At 10% savings (₹8,000/month) — half that: ₹79.4 lakh. Those extra ₹8,000/month in savings create ₹80 lakh of extra wealth purely through compounding. Every percentage point of savings rate matters enormously over 20 years.
Calculate your net worth
See your total assets minus liabilities — your true financial picture
Does the 50/30/20 rule work for all Indian income levels?▼
The 50/30/20 rule is a starting guideline, not a rigid law. For incomes below ₹30,000/month, keeping needs at 50% is very difficult in metro cities — aim for 60% needs / 20% wants / 20% savings instead. For incomes above ₹2 lakh/month, 50% needs is easily achievable and the savings allocation should be 25–30%. The 20% savings floor is the one number that shouldn't be compromised regardless of income level.
Should I count EMIs in needs or savings?▼
Count loan EMIs in needs if the loan is for something essential (home, vehicle for work commute). Count extra prepayments above the mandatory EMI in the savings bucket. The principal component of a home loan EMI is building an asset, so many financial planners count it in savings — but for budgeting simplicity, count the full EMI in needs since it's a fixed mandatory outflow.
What if my rent alone takes up 40% of my income?▼
This is common in Mumbai, Bengaluru, and Delhi for people in the early career phase. Adjust to a 55/20/25 or 60/20/20 split rather than cutting savings. The 50% needs target is a guideline, not a mandate. If housing + transport genuinely require 55%, accept that and protect the 20% savings floor. As income grows, the percentage of needs naturally falls even if the absolute amount stays the same.
How is the budget health score calculated?▼
The score starts at 100 and deducted: 20 points if needs exceed 55% of income, 15 points if wants exceed 35%, 25 points if savings are below 15%, 20 points if total spending exceeds income, and 10 points if more than 10% of income is unallocated (assuming you'll spend it). A score of 80+ is good, 60–79 is moderate, below 60 needs attention.
Where should I put my 20% savings?▼
Priority order: (1) 3–6 months emergency fund in a liquid FD or savings account first. (2) Employer NPS or EPF matching — free money, always capture. (3) Term insurance and health insurance if you don't have them. (4) PPF or ELSS for 80C tax saving. (5) Equity SIP for long-term wealth building. Once steps 1–4 are covered, direct remaining savings to equity SIP. Don't invest money in equity you might need within 3 years.
