Budgeting Rules Explained: 50/30/20, 70/20/10 and the Zero-Based Method

A budget is a plan for your money before the month begins — not a post-mortem after it ends. The best framework is the one you'll actually follow. Here are the three most-used rules, side by side.

50 / 30 / 20 — the balanced default

Fifty percent to needs, thirty to wants, twenty to savings & investing. Works well for salaried Indians in tier-1 cities where rent alone can eat 30% of take-home.

70 / 20 / 10 — for tight cashflows

Seventy percent to needs, twenty to savings, ten to wants. Best for early-career professionals or single-income households with high fixed costs.

Zero-Based Budgeting

Every rupee gets a job before the month starts. Income − Expenses − Savings = ₹0. It's the most demanding method but produces the sharpest awareness of where money goes.