The 50/30/20 rule, tuned for Indian households

The 50/30/20 rule divides your take-home pay into needs, wants and savings. It is a compass, not a court order — and in most Indian households, the compass needs recalibration.

Start with needs, but count honestly. Rent or EMI, groceries, school fees, insurance premiums and the money you send to parents all belong here. If this crosses 50 percent — and for most urban families it does — trim from wants first, never from savings.

Then protect the 20 percent like it is already spent. The easiest way is to move it out on salary day: build an emergency fund until you hold six months of expenses, then start SIPs mapped to goals with dates attached.

Review the split once a year, after every raise. Lifestyle inflation is the quiet thief of middle-class wealth — let your savings rate rise with your income, and the future largely takes care of itself.