Budgeting Guide #61: 50/30/20 Rule — Still Relevant in India? Explained with Real Example

 

Heard of the 50/30/20 Rule? Here's How It Works (and When to Break It)

The 50/30/20 budgeting rule is a global favorite — but does it really work in India with our inflation and expenses? Let’s find out.

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📊 What is the 50/30/20 Rule?

Divide your monthly income as:

• 50% Needs – rent, bills, groceries, EMIs
• 30% Wants – shopping, outings, OTT, gadgets
• 20% Savings – SIPs, RD, insurance, debt payoff

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💸 Real-Life Example

Monthly income: ₹50,000

Category	%	Amount (₹)
Needs	50%	₹25,000
Wants	30%	₹15,000
Savings	20%	₹10,000

This creates balance, control, and progress — all at once.

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⚠️ When It Doesn’t Work

• If you're low-income (₹15k–₹25k), needs may go up to 70%
• In case of EMIs, debt, or financial emergencies

Customize to 70/20/10 or even 60/30/10 if needed.

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💡 Pro Tips

• Use budgeting apps like Monefy or Walnut
• Create 3 bank accounts: Needs, Wants, and Savings
• Set auto-transfer for SIPs and RDs

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✅ Conclusion

The 50/30/20 rule is simple and effective — but treat it like a starting point, not a law. Adjust to your lifestyle and keep tracking monthly.

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