70 Percent Rule: What It Is and How It Applies to Finance in India

When it comes to managing money, the 70 percent rule, a straightforward income allocation strategy where 70% of earnings go to living expenses, 20% to savings, and 10% to investments. Also known as the 70-20-10 budget, it’s one of the most practical systems for everyday Indians who want to stop living paycheck to paycheck without tracking every rupee. Unlike complicated budget apps or rigid spreadsheets, this rule cuts through the noise. You don’t need to calculate exact percentages for groceries, electricity, or Netflix. You just take your net income, split it into three buckets, and stick to the plan.

This rule works because it aligns with how real people live. In India, where incomes vary widely and financial goals range from buying a scooter to funding a child’s education, the 70 percent rule gives you structure without suffocation. It’s used by teachers in small towns, freelancers in Bangalore, and shop owners in Jaipur who want to build wealth slowly but surely. The savings, the 20% portion set aside for emergencies and short-term goals often goes into a recurring deposit or a high-yield savings account — things you’ll find covered in posts about HYSA and PPF vs FD. The investment, the 10% that grows over time usually ends up in mutual funds, sometimes following strategies like the 15-15-15 rule, where consistent monthly contributions compound into lakhs over years. These aren’t abstract ideas — they’re the same actions people take when they follow the 70 percent rule.

What makes this rule powerful in India is its flexibility. If you earn ₹50,000 a month, you spend ₹35,000, save ₹10,000, and invest ₹5,000. If you get a raise to ₹80,000, you don’t panic — you just adjust the numbers. No need to overhaul your life. You can still enjoy meals out, buy gifts, or pay for a weekend trip — as long as you stay under 70%. And if you slip one month? You reset next month. No guilt. No penalties. Just progress.

There’s no magic here. No secret formula. Just discipline wrapped in simplicity. The 70 percent rule doesn’t promise quick riches. It promises stability. It’s the quiet foundation behind people who retire early, pay off home loans ahead of schedule, or send their kids to college without debt. And if you’re wondering how to start, you don’t need a financial advisor. You need a bank account, a calculator, and the willingness to say no to one impulse buy this month.

Below, you’ll find real stories and practical advice from Indians who’ve used this rule — whether they’re managing EMIs, comparing PPF with FDs, or figuring out how to invest ₹10,000 wisely. These aren’t theory pieces. They’re lived experiences. And they all connect back to one simple idea: spend less than you earn, and let time do the rest.