Budget Calculator India

About the budget calculator

A budget is a plan for your take-home pay before the month starts, not a record of where it went. The calculator splits your money into needs, wants and saving, shows the shares, and checks them against the 50/30/20 guide. Below the tool: what counts as a need, why the saving rate matters more than the investment you pick, and what to do with money that has no job yet.

How should I split my take-home pay?

A good starting point is 50/30/20: up to 50% on needs, up to 30% on wants and at least 20% to saving and investing. The calculator's default, a ₹1 lakh take-home, spends 45% on needs and 13% on wants and puts 15% into a SIP, which leaves ₹27,000 a month with no job. Enter your own lines above, and add or remove as many as you need.

Where does the 50/30/20 rule come from?

It was popularised by Elizabeth Warren and Amelia Warren Tyagi in their book All Your Worth. In their version the 20% covers saving and paying off debt beyond the minimum. In an Indian metro, rent alone can push needs past 50%. If that happens, take the extra from wants and protect the 20%, because the saving line is the one that changes your future.

What counts as a need and what is a want?

A need is something you would still pay if your income stopped for three months: rent or the home loan EMI, groceries, electricity and phone, school fees, transport to work, and your term and health insurance premiums. A want is everything you could pause: eating out, shopping, upgrades, most holidays. Be honest with the labels, because a want filed as a need is the easiest way to make a budget look fine when it is not.

Does it matter whether I save 10% or 20%?

More than almost any investment choice you will make. On a ₹1 lakh take-home, the difference between 10% and 20% is ₹10,000 a month, and over 20 years that gap grows to about ₹92 lakh at an assumed 12% a year.

What should I do with the money left over?

Give it a job before the month starts, or it will be spent. The first job is an emergency fund of six months of expenses; the emergency fund calculator shows how long that takes. After that, send it to a SIP or to clearing expensive debt.

Should I save first or spend first?

Save first. Set your SIP and any recurring deposit to go out a day or two after salary day, and live on what is left. Saving whatever remains at the end of the month usually means saving very little, because spending expands to fill whatever is in the account.

How do loan EMIs fit into a budget?

The home loan EMI is a need. Personal loan EMIs and credit card dues are also needs in the sense that you must pay them, but they are the first thing to get rid of, because their interest is far higher than any safe return. Clear them before you raise your SIP. The debt you could kill explains why.

How do I budget for yearly expenses?

Add up the bills that come once or twice a year, such as insurance premiums, school fees, vehicle insurance and festival spending, divide by 12, and put that amount aside every month as its own line. That way the big months do not break the budget or push you onto a credit card.

What should I do when my salary goes up?

Hold your spending where it is for one more year and send the raise to saving. Most people's lifestyle climbs with every raise, which is why a higher income often does not mean more savings. A step-up SIP does this automatically by raising your SIP each year.

What does the calculator leave out?

It works on take-home pay, so tax is already out. It assumes a steady monthly income, so if yours is irregular, budget on your lowest normal month and save the extra in good months. It also does not know about money you send to family, which for many Indian households is a real need and belongs in the needs line.

How often should I review my budget?

Once a month is enough. A 30-minute money date at the start of each month, to check last month's spending against the plan and set this month's, beats tracking every rupee daily and giving up in three weeks.