Most people know their salary but not where it goes.
About this calculator
Most people know their salary but not where it goes. The 50/30/20 budget rule gives you three buckets: 50% for needs, 30% for wants, and 20% for savings and debt payoff. On ₹80,000 take-home that is ₹40,000 for rent and EMIs, ₹24,000 for dining out and subscriptions, and ₹16,000 for SIP and your emergency fund.
Needs are non-negotiable — housing, loan EMIs, groceries, utilities, insurance and commute. Wants are choices you can cut in a bad month: OTT subscriptions, weekend trips, new gadgets. Savings covers everything that builds future wealth: mutual fund SIP, PPF, extra home loan prepayment and topping up your emergency buffer.
The rule is a starting point, not a law. In Mumbai or Bengaluru, rent alone can push needs above 50%. Toggle custom split to model your city and life stage. If savings drops below 20%, trim wants before cutting long-term investments. Track the result monthly with [[net-worth]] and use [[emergency-fund]] to size the buffer inside your savings bucket.
Common uses
- First salary job — setting a monthly spending plan on ₹40k–₹1L take-home
- Couple merging incomes and agreeing on a joint monthly split
- Checking whether rent + EMIs fit inside the 50% needs bucket
- Modelling a tighter budget during a job change or sabbatical
- Comparing 50/30/20 against a custom 45/25/30 split for a higher savings rate
Frequently asked questions
What is the 50/30/20 budget rule?
It splits take-home income into three parts: 50% for needs (rent, EMIs, groceries, bills), 30% for wants (dining, travel, shopping), and 20% for savings and debt payoff. It is a simple framework popularised by Elizabeth Warren.
Does the 50/30/20 rule work in India with high rent in metros?
In Mumbai or Bengaluru, rent and EMIs often push needs above 50%. Use the custom split to reflect your city. The rule still helps — if needs are 60%, you know wants and savings must shrink to keep the total at 100%.
Should EMIs count as needs or savings?
Regular EMIs are needs — they are fixed monthly obligations. Extra prepayment above your EMI belongs in the savings bucket because it builds net worth rather than covering current living costs.
How much should I save if I earn ₹1 lakh per month?
At 50/30/20 on ₹1 lakh take-home: ₹50,000 for needs, ₹30,000 for wants, ₹20,000 for savings. If your needs are lower, redirect the surplus to savings rather than inflating wants.
Can I use gross salary instead of take-home for the 50/30/20 rule?
Use take-home (post-tax) income. The percentages apply to money that actually hits your bank account. Using gross salary overstates every bucket and leads to overspending.