30-30-40: Wanna try this to secure your needs?
Ritesh Sabharwal CFP®W.M.W #12: 30-30-40: Wanna try this to secure your needs? Reading time: 4 minutes - September 6, 2025 ↓Hey Reader Most of us think personal finance is complicated. But in reality, it only needs one thing: a system that works every month, without guilt. I’ve seen this play out so many times - mid-career professionals earning ₹25-30 lakhs a year, yet living paycheck to paycheck. Why? Because EMIs, credit card spends, kids’ fees, and lifestyle creep eat into everything. And when you ask them how much they actually save, the answers are vague. That’s where the 30-30-40 Rule comes in. A simple way to split your money into 3 clear buckets so you can live comfortably today and still build a future corpus - a simple split that pays for your past, present, and future. Most people don’t fail at money because they earn less. They fail because they don’t know where it all goes. Here’s what we’re going to cover today:
The 30-30-40 RuleHere’s how you divide your monthly salary: 30% → Needs (Living Expenses) 30% → Wants + EMIs/Debts 40% → Savings & Investments How 40% of your monthly salary creates Financial IndependenceThis is the engine that powers your freedom. SIPs, retirement funds, long-term investments, education goals - it all fits here. Think of it this way: if you invest this 40% consistently over 15-20 years, the yearly returns can grow big enough to cover your entire “needs” bucket (the present 30%). That’s when your future pays for your present - and you achieve financial independence. Let’s assume you earn ₹50,000 per month. Here’s how the rule plays out:
Investing ₹20,000/month for 15 years at 12% = ₹1 Crore corpus
Meanwhile, your ₹15,000 expense (needs) today will grow (with 6% inflation) to about ₹36,000/month (~₹4.31 Lakh/year) in 15 years
With ₹1 Cr corpus, even a 4.5% annual return is enough to cover these yearly expenses (needs)
Your investments now produce enough income to take care of your lifestyle later. That’s financial independence. Key TakeawayThe 30-30-40 Rule isn’t about cutting out coffee or living frugally. It’s about building a system that:
Action step:Take your monthly salary. Write down 30%, 30%, 40%. Are you following it already? Or are your EMIs/wants eating into your savings bucket?
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Ritesh Sabharwal
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