The 50/30/20 rule is a simple way to budget your take-home pay: 50% for needs, 30% for wants and 20% for savings and debt repayment. It's a starting point, not a strict law, and the calculator shows the split for your income.
How the 50/30/20 rule works
| Share | What it covers |
|---|---|
| 50% needs | Rent or home loan EMI, groceries, utilities, transport, insurance, school fees, minimum loan payments |
| 30% wants | Eating out, shopping, subscriptions, travel, hobbies, upgrades |
| 20% savings | SIPs, PPF, emergency fund, extra loan prepayments |
Example: Take-home pay of ₹80,000 a month
Needs: ₹40,000. Wants: ₹24,000. Savings: ₹16,000.
Adapting it to Indian cities
In Mumbai or Bengaluru, rent alone can take 30–40% of a young professional's pay, so needs often exceed 50%. That's fine; cut wants first and protect the 20% savings. If you earn well, push savings to 30% or more. Start with an emergency fund, then automate the savings share into a SIP on salary day so it happens before spending.
How to use this calculator
- Enter your monthly take-home pay.
- Adjust the percentages if you like.
FAQs
What if my rent is too high for 50%?
Cut back on wants first, and try to keep saving at least 20%.
Results are estimates and aren't financial advice. For decisions about your own money, check with a qualified adviser. Spotted a mistake? Tell us.