50-30-20 Rule Explained: The Budget Formula That Actually Works in India
The 50-30-20 rule is the simplest budgeting formula that actually works. Here’s how to use it in India with real examples and a free tracker.
Struggling to manage your monthly income?
You’re not alone — most people in India know they should budget… but don’t know where to start.
That’s where the 50-30-20 Rule comes in — a simple, proven formula that helps you save, spend, and grow your money without feeling restricted.
And the best part?
It works whether you earn ₹10,000 or ₹1,00,000.
Let’s break it down, Indian-style — with real examples.
💡 What Is the 50-30-20 Rule?
It’s a budgeting rule that divides your monthly income into 3 parts:
| Category | % of Income | Purpose |
|---|---|---|
| 🧾 Needs | 50% | Essentials: Rent, food, bills |
| 🍿 Wants | 30% | Lifestyle: Shopping, Netflix |
| 💰 Savings/Debt | 20% | Investments, loan repayment |
💬 The formula was popularized by US senator Elizabeth Warren but applies beautifully in India too — with a few tweaks.
📊 Let’s See a Real Example
Income: ₹30,000/month
| Category | Amount | Examples |
|---|---|---|
| Needs (50%) | ₹15,000 | Rent, groceries, electricity |
| Wants (30%) | ₹9,000 | Swiggy, mobile upgrade, Netflix |
| Savings (20%) | ₹6,000 | SIP, emergency fund, loan EMI |
🧾 What Counts as “Needs” in India?
- House rent or EMI
- Groceries & cooking gas
- Mobile + internet bill
- Electricity, water
- School/college fees
- Transport (fuel, metro, Ola/Uber)
✅ Must-have for survival, not comfort.
🍿 What Counts as “Wants”?
- Ordering food
- Shopping (Zara, Flipkart, Amazon)
- Movies, OTT subscriptions
- Travel, gifts, gadgets
- Upgrades, not essentials
Wants aren’t bad — but they should stay within 30%.
💰 What Counts as “Savings”?
- SIPs in mutual funds
- PPF, NPS, RD
- Emergency fund savings
- Credit card or personal loan EMI
- Term/life/health insurance premiums
✅ This is your “future-proofing” zone.
🔁 Customize the Rule (If Needed)
Life in India isn’t one-size-fits-all.
You can tweak the rule to:
| Life Stage | Custom Formula |
|---|---|
| Student | 60-20-20 (more needs) |
| Just started job | 50-30-20 (default) |
| Living with parents | 40-20-40 (boost savings!) |
| Supporting family | 60-20-20 (more needs) |
The point isn’t perfection, but awareness + control.
🧠 Benefits of Using This Rule
✅ Simple and visual — easy to follow
✅ No need for apps or spreadsheets
✅ Works for any salary bracket
✅ Helps reduce guilt and impulsive spending
✅ Encourages intentional money use
📱 Tools to Help You
- Google Sheet or Notion template (free, you can create)
- Budget apps: Walnut, Goodbudget, Money Manager
- Pen + paper is still gold if you’re consistent
🧾 Sample Monthly Budget (₹50,000 Income)
| Category | ₹ Amount | Sample Use |
|---|---|---|
| Needs | ₹25,000 | Rent ₹10k, food ₹5k, bills ₹2k, etc. |
| Wants | ₹15,000 | Travel ₹6k, shopping ₹4k, OTT ₹500 |
| Savings | ₹10,000 | SIP ₹4k, RD ₹2k, insurance ₹1.5k, etc. |
💬 Final Thoughts
You don’t need complex spreadsheets or 10 budgeting rules.
Start with just one — the 50-30-20 rule.
Track for one month. You’ll be surprised where your money goes — and how easy it is to fix.
Budgeting isn’t about restrictions.
It’s about giving yourself permission to enjoy money without regret.
📢 Bonus Download:
🎁 Free “50-30-20 Budget Tracker Sheet” – For ₹20K, ₹50K, and ₹1L income levels.
👉 Subscribe to Bitveen to get your copy!
⚠️ Disclaimer:
This article is for educational purposes only and does not constitute financial or legal advice.