The 50/30/20 Savings Rule Calculator helps you easily divide your income into three categories: 50% for essentials, 30% for discretionary spending, and 20% for savings or financial goals. It simplifies budgeting and ensures balanced financial planning.
50/30/20 Rule Calculator
Housing Costs (50%): ₹0
Necessary Expenses (30%): ₹0
Financial Goals (20%): ₹0
What is 50/30/20 Savings Rule?
The 50/30/20 Savings Rule is a budgeting strategy that allocates 50% of your income to housing and essential expenses, 30% to discretionary spending, and 20% to financial goals like savings or debt repayment. This rule helps balance needs, wants, and savings for better financial management. It's a simple, effective way to create a structured budget and prioritize long-term financial health.
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The 50/30/20 Savings Rule divides your income into 3 main categories:
- 50% for Essentials: This includes necessary expenses such as rent or mortgage, utilities, groceries, transportation, and health insurance. For example, if your monthly income is ₹50,000, you would allocate ₹25,000 to these essential needs.
- 30% for Discretionary Spending: This covers non-essential expenses like dining out, entertainment, hobbies, and shopping. With the same ₹50,000 monthly income, you would set aside ₹15,000 for these optional pleasures.
- 20% for Financial Goals: This portion is reserved for savings, investments, or debt repayment. If you earn ₹50,000 a month, you would direct ₹10,000 towards building an emergency fund, contributing to retirement accounts, or paying off loans.
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