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The 70/10/10/10 rule divides income into expenses, investments, savings, and debt or self-growth, helping workers manage money and avoid living paycheck to paycheck
A simple budgeting framework known as the 70/10/10/10 rule is now gaining traction among money experts as a way to break that cycle.
If your bank balance seems to hit rock bottom barely days after payday, you’re not alone. From young professionals to mid-career earners, many workers find themselves living from one salary credit to the next, regardless of how “decent” the pay packet looks on paper.
Financial planners say the problem often lies not in reckless spending, but in the absence of a clear structure for how income is used. Salaries typically flow into a single account from which every bill, expense and indulgence is paid. Needs take priority, wants creep in, and savings are pushed to “next month”, until there is nothing left to save.
A simple budgeting framework known as the 70/10/10/10 rule is now gaining traction among money experts as a way to break that cycle.
What the rule says
Under the 70/10/10/10 formula, your monthly take-home income is divided into four distinct buckets – 70% for regular expenses, 10% for long-term investments, 10% for short-term savings, and 10% for debt repayment or self-development. The key idea is to assign every rupee a purpose before it is spent.
70% for living costs
This portion covers household expenses such as rent or home loan EMIs, groceries, utilities, transport, school fees and insurance. If your spending consistently exceeds 70%, experts warn it may be time to trim lifestyle expenses or look at boosting income.
10% for investments
This share is meant purely for the future, channelled into long-term instruments like mutual fund SIPs, PPF, NPS or retirement plans. Regular investing allows compounding to work over time, helping small sums grow into sizeable wealth.
10% for savings
This bucket funds short-term needs and emergencies, from medical costs to urgent repairs or travel. Building an emergency corpus of at least six months’ expenses is widely recommended to avoid falling back on credit cards or loans.
10% for debt or self-growth
If you have outstanding loans or high-interest credit card dues, this final 10% should go towards repayment. For those who are debt-free, the same fund can be used for upskilling, courses, health and wellness, investments that can raise earning potential over time.
Advisers suggest tracking expenses honestly for a month before implementing the rule. If shifting to the 70/10/10/10 structure in one go feels tough, gradual adjustments work better. Automating transfers and SIPs on payday also helps ensure savings and investments don’t get sidelined.
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December 29, 2025, 19:10 IST
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