Managing money wisely can feel overwhelming, especially when your salary is between ₹20,000 and ₹35,000 per month. But with a few simple thumb rules, you can make confident decisions about savings, investments, loans, and expenses — without needing a financial degree.
These thumb rules are not rigid laws, but time-tested formulas that can help build strong financial habits.
1. 💰 Savings Rule – Save at least 15% of your salary
No matter your income, aim to save a minimum of 15%. If you’re young with fewer responsibilities, go up to 20%. Example: ₹25,000 salary → save at least ₹3,750/month
2. 📊 70:20:10 Spending Split
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70% for needs and bills (rent, food, transport)
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20% for saving and investing
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10% for donations or debt payments
3. 📋 50:30:20 Budgeting Rule
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50%: Needs (non-negotiable expenses)
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30%: Wants (entertainment, shopping)
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20%: Savings or debt repayments
4. 📈 30:30:30:10 Investment Allocation Rule
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30%: Equity mutual funds/stocks
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30%: Balanced/hybrid funds
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30%: Retirement (NPS, EPF, PPF)
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10%: Emergency fund (liquid mutual funds)
5. 🏠 5x House Affordability Rule
Your home value should not exceed 5–6 times your annual income. Example: ₹3,00,000 annual salary → house budget = ₹15–18 lakhs
6. 🛡️ Insurance Rule – 10x Annual Income
Your life insurance cover should be at least 10 times your annual income.
7. 🚨 Emergency Fund Rule – Save 6 months of expenses
COVID-19 taught us the value of an emergency fund. Try to build a fund that covers at least 3–6 months of your regular expenses.
8. 🧾 Portfolio Rule – 100 minus your age
100 – Your age = % of investment in equities. The rest can go in safer instruments. Example: Age 30 → 70% equity, 30% debt
9. 👵 Retirement Corpus Rule – 12x Annual Salary
To retire comfortably, aim to build a retirement fund worth 10–12 times your annual salary.
10. 💸 EMI Rule – Not more than 35% of your salary
Your total monthly loan EMIs should not exceed 35% of your take-home pay.
11. 🔁 Rule of 72 – How fast will your money double?
Divide 72 by your interest rate to know how many years it will take to double. Example: 9% return → 72 ÷ 9 = 8 years
12. 🔁 Rule of 114 – Tripling money
114 ÷ Interest Rate = Years to triple your money
13. 🔁 Rule of 144 – Quadrupling money
144 ÷ Interest Rate = Years to quadruple your money
14. 📉 Rule of 70 – Impact of Inflation
To know how many years it will take for your money to lose half its value due to inflation, divide 70 by the current inflation rate. Example: 5% inflation → 70 ÷ 5 = 14 years
15. 💳 Credit Card Rule – Use just 1 or 2
Avoid financial stress by using only one or two credit cards for convenience and control.
16. 🚗 Car Purchase Rule – ≤ 50% of Annual Income
Car value shouldn’t exceed 50% of your annual income.
Car Loan 20/4/10 Rule:
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20% Down payment
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Loan tenure ≤ 4 years
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EMI ≤ 10% of monthly income
17. ⏳ 30-Day Rule for Windfall or Big Purchases
Wait 30 days before making an impulse purchase. If you still need it, go ahead — if not, save the money.
18. 🏡 80/10/10 Loan Structure for Buying a House
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80%: Bank loan
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10%: Secondary loan (if needed)
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10%: Your own down payment
19. 📈 12-5-3 Rule of Returns
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Equity funds → 12% (long term)
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Debt instruments → 5%
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Savings account → 3%
20. 💵 4% Withdrawal Rule (Retirement)
Withdraw just 4% of your retirement corpus every year to make your money last. ₹10,00,000 corpus → withdraw ₹40,000/year or ₹3,300/month
✍️ Conclusion: Build Smart Habits, Not Just Wealth
These rules are designed to simplify your personal finance journey. While your income may seem modest, applying these principles consistently can help you:
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Build emergency buffers
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Reduce financial stress
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Achieve long-term goals “Managing money is not about having more, but using wisely what you already have.”
