The 50-30-20 Budget Rule
The simplest budgeting framework that works for most Indian families:
50% — Needs
Rent/EMI, groceries, utilities, insurance premiums, school fees, transportation, minimum debt payments.
30% — Wants
Dining out, entertainment, shopping, subscriptions, vacations, hobbies, upgrades.
20% — Savings & Investments
SIPs, PPF, NPS, emergency fund, loan extra payments. This should go out first on salary day.
Pro tip: If you can push savings to 30% or more, you'll build wealth significantly faster. Many successful investors save 40-50% of their income.
Budget Categories for Indian Families
| Category | Recommended % of Income | Example (?1L income) |
|---|---|---|
| Housing (Rent/EMI) | 25-30% | ?25,000-30,000 |
| Groceries & Household | 10-15% | ?10,000-15,000 |
| Transportation | 5-10% | ?5,000-10,000 |
| Insurance Premiums | 5-7% | ?5,000-7,000 |
| Children's Education | 5-10% | ?5,000-10,000 |
| Utilities & Bills | 3-5% | ?3,000-5,000 |
| Lifestyle & Entertainment | 10-15% | ?10,000-15,000 |
| Savings & Investments | 20-30% | ?20,000-30,000 |
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