Budgeting in India — How to Apply 50/30/20 When Rent Eats Half Your Income

## The Indian metro budgeting reality In Mumbai, Bengaluru, or Delhi NCR, housing often consumes 40–50% of take-home pay for a working professional. The classic 50/30/20 rule assumes housing is part of the 50% needs bucket — which gets tight fast. ## Adapted framework for India **If you rent in a metro:** - Needs (including rent): 55–60% - Wants: 15–20% - Savings: 20% (non-negotiable) Squeeze wants, not savings. The 20% savings floor is more important than the exact split. ## Indian savings priorities in order 1. **Emergency fund** (3–6 months expenses) — first priority, in liquid fund or savings account 2. **EPF** — already deducted; acknowledge it as savings 3. **Term insurance + health insurance** — protective, not savings but non-negotiable 4. **NPS** (₹50,000 for extra 80CCD(1B) deduction) — if in old regime 5. **ELSS SIP** (for 80C + wealth creation) — ₹1.5 lakh/year 6. **Additional equity SIP** — for remaining goals ## The pay yourself first approach Set up SIP auto-debits on your salary credit date. Your savings happen automatically; you spend what's left. This is far more effective than spending first and "saving what remains" — which is typically zero.