Budget Planner (50/30/20)
Split your salary into needs, wants and savings and compare it with what you really spend.
Save & invest every month
ā¹12,000
Twelve Thousand Rupees
20% of ā¹60,000
Needs (50%)
ā¹30,000
Wants (30%)
ā¹18,000
Savings (20%)
ā¹12,000
Saved in a year
ā¹1,44,000
before any returns
Emergency fund goal
ā¹1,80,000
6 months of needs
Pay yourself first: set your SIPs and RDs to go out a day or two after salary day, then spend what's left. Turn on "Compare with what I actually spend" to check your real budget.
Your target split
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Results are estimates, not financial advice. Rates, charges and rules change, so confirm with your bank, post office or a financial adviser before you decide. Terms of use
How to Use
- Enter your monthly take-home income: your in-hand salary after tax and PF, plus any regular side income.
- Keep the 50 / 30 / 20 split or change the percentages for needs, wants and savings. They must add up to 100%.
- See your monthly targets for each part, the yearly savings and an emergency-fund goal.
- Turn on Compare with what I actually spend and fill in your rent, EMIs, groceries, bills, fees, eating out, shopping, SIPs and other categories. For yearly costs, enter one-twelfth.
- Check the chart, the target-vs-actual bars and the suggestions to see where your budget is off and what to change first.
What is the 50/30/20 budget?
The 50/30/20 rule is a simple way to split your take-home pay. It was popularised by Elizabeth Warren and Amelia Warren Tyagi in their 2005 book All Your Worth. Instead of tracking dozens of categories, you sort every rupee into three groups:
- 50% Needs: what you must pay even in a bad month: rent or home-loan EMI, other loan EMIs, groceries, electricity, gas, mobile and internet, commute, school fees, insurance premiums, and support you've committed to parents or family.
- 30% Wants: what makes life enjoyable but could be cut: eating out and food delivery, shopping, OTT subscriptions, movies, holidays and gadget upgrades.
- 20% Savings: money for your future: SIPs, PPF, NPS, RDs, building an emergency fund, and paying off loans early.
The formula
Needs = take-home income Ć 50%
Wants = take-home income Ć 30%
Savings = take-home income Ć 20%
Wants = take-home income Ć 30%
Savings = take-home income Ć 20%
Worked example: ā¹60,000 take-home
| Group | Target | Actual (example) | Share |
|---|---|---|---|
| Needs: rent ā¹12,000, EMI ā¹5,000, groceries ā¹6,000, bills ā¹2,500, commute ā¹2,500, fees ā¹2,000, insurance ā¹1,500 | ā¹30,000 | ā¹31,500 | 52.5% |
| Wants: eating out, shopping, OTT, trips, other | ā¹18,000 | ā¹10,500 | 17.5% |
| Savings: SIP ā¹5,000, PPF/RD ā¹2,000, emergency fund ā¹2,000 | ā¹12,000 | ā¹9,000 | 15% |
| Not assigned | None | ā¹9,000 | 15% |
Needs are slightly over target, wants are well under, and ā¹9,000 isn't assigned to anything. Unassigned money tends to vanish into small spends, so the quickest fix is to set up a SIP or RD of at least ā¹3,000 that goes out the day after salary day. That brings savings up to the 20% target.
Adapting the rule to Indian life
- Big-city rents and home loans can push needs well past 50%. A 60/20/20 or 60/25/15 split is a realistic starting point. Try to bring needs down as your income grows.
- EMIs: count home, car and education loan EMIs as needs. An EMI on a phone or TV you bought on "no-cost EMI" is really a want. If EMIs take more than about a third of your take-home pay, avoid new loans and prepay the costliest one first (credit cards and personal loans).
- Family support: money sent to parents or siblings is a commitment for many households, so list it under needs.
- Festivals, weddings and annual fees: divide yearly costs (Diwali shopping, school admission fees, insurance premiums, vehicle insurance) by 12 and budget them every month, so they don't wreck one month's budget.
- EPF is already deducted: your employee PF contribution comes out before your take-home pay. It's real saving on top of the 20%, so the 20% here is what you save from your in-hand salary.
Build the safety net first
Before you invest for long-term goals, build an emergency fund of 3ā6 months of essential expenses in a savings account, sweep FD or liquid fund, so a job loss or hospital bill doesn't push you into debt. Make sure you have health insurance for the family and, if anyone depends on your income, a term life plan. After that, direct the savings share to your goals through SIPs, PPF or NPS.
Tips that make a budget stick
- Pay yourself first: schedule SIPs and RDs for the day after salary credit.
- Use a separate account or UPI wallet for "wants" spending, so you can see when the month's allowance is used up.
- Review subscriptions every few months. Unused OTT plans and app subscriptions add up.
- When you get a raise, increase your SIP by at least half the raise before your lifestyle expands to fill it.
Frequently Asked Questions
It's a simple way to split your take-home pay: 50% for needs (rent, EMIs, groceries, bills, fees, insurance), 30% for wants (eating out, shopping, entertainment, trips) and 20% for savings and investments (SIPs, PPF, emergency fund, loan prepayment). Elizabeth Warren and Amelia Warren Tyagi popularised it in their 2005 book All Your Worth.
With 50/30/20, a ā¹50,000 take-home salary gives ā¹25,000 for needs, ā¹15,000 for wants and ā¹10,000 for savings. If rent and EMIs take more than ā¹25,000, a 60/20/20 split (ā¹30,000 / ā¹10,000 / ā¹10,000) keeps savings intact by trimming wants.
Home, car and education loan EMIs are commitments, so count them as needs. EMIs for a phone, TV or holiday bought on credit are really wants spread over time. Extra payments you make to close a loan early count as savings.
Often not at first. High rents in cities like Mumbai, Bengaluru and Delhi can push needs to 60% or more. Use the percentages as a direction, not a strict rule: keep savings at 15ā20% by cutting wants, and move towards 50% needs as your income grows.
A common guideline is 3ā6 months of essential expenses (needs), kept somewhere safe and easy to withdraw, such as a savings account, sweep-in FD or liquid fund. If your income is irregular or one person earns for the whole family, aim for the higher end.
Your employee EPF contribution is deducted before your take-home pay, so it isn't part of the income you enter here. Treat it as a bonus on top of the 20% you save from your in-hand salary. Voluntary PF (VPF) is also deducted from your salary, so the same applies to it.