In short
A simple way to plan a monthly salary is the 50/30/20 rule: spend up to 50% on needs (rent, food, travel, EMIs), up to 30% on wants (eating out, shopping, subscriptions) and save or invest at least 20%. On a ₹35,000 take-home salary that means about ₹17,500 for needs, ₹10,500 for wants and ₹7,000 saved — enough to build a 6-month emergency fund of ₹1.05 lakh in 15 months and then start a SIP of around ₹5,000.
How the salary planner works
Enter your in-hand (after-tax) salary and your fixed monthly costs. The planner splits the salary into needs, wants and savings using the percentages you set (50/30/20 by default), then works out:
- Emergency fund target — 6 months of "needs" spending, kept in a savings account or liquid fund.
- Time to build it — the target divided by your monthly savings.
- Suggested SIP — 70% of your savings, with the remaining 30% kept flexible. The 10-year value assumes a 12% annual return, compounded monthly.
If your fixed costs exceed the needs budget, the planner warns you — that is the first thing to fix, either by raising the needs percentage or by cutting fixed costs.
Key facts
| 50/30/20 rule | 50% needs, 30% wants, 20% savings — a starting point, not a law |
|---|---|
| Emergency fund | 3–6 months of essential expenses; 6 if your income is variable |
| Where to keep it | Savings account, sweep-in FD or liquid mutual fund — not equity |
| Order of priorities | Emergency fund → term insurance (if dependants) → SIP → other goals |
| Step-up SIP | Increase the SIP by 10% every year as salary grows |
| Rent rule of thumb | Keep rent under 30% of take-home pay |
Frequently asked questions
What is the 50/30/20 rule?
A budgeting guideline: put 50% of take-home income toward needs, 30% toward wants and 20% toward savings and debt repayment. It is a simple starting point; if your rent is high, needs may be 60% and wants 20%.
How much should I save from my salary?
Aim for at least 20% of take-home pay. If that is not possible right now, start with 10% and increase it with every raise. The habit matters more than the amount at the beginning.
How big should my emergency fund be?
Six months of essential expenses (rent, food, EMIs, utilities) is the usual target — three months if your job is very stable, up to twelve if your income is irregular. Keep it somewhere you can withdraw within a day.
Should I start a SIP before building an emergency fund?
Build at least 2–3 months of emergency savings first, then start the SIP. Without a buffer, an unexpected expense may force you to stop or redeem the SIP at a bad time.
How much SIP can I do on a ₹30,000 salary?
With 20% savings (₹6,000), a SIP of ₹4,000–5,000 a month is realistic after the emergency fund is in place. Even ₹500–1,000 is a fine start.
Last reviewed: September 2026 · Educational estimate only, not financial advice. See Disclaimer.
