Full explanation
50% of take-home pay for needs (rent, EMIs, groceries, utilities, insurance). 30% for wants (dining, entertainment, shopping, subscriptions). 20% for savings and investments. Popularized by Senator Elizabeth Warren. In India's major cities with high housing costs, the 50% for needs may not be realistic — many pay 40–50% of income on rent alone. Adapt: if rent is 40%, reduce wants to 20%, target 20% savings anyway. The key principle: savings is not "what's left" — it's a non-negotiable first allocation.