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Master Your Home Loan Budget with the Easy 30-30-30-10 Rule

Buying a home is an important step in life that shows progress toward stability and safety, but it also brings financial duties, especially when you choose to take out a mortgage.

Taking care of your money well is very important so that the house you always wanted does not become a heavy financial load.

A strategy that more people are finding useful for managing money is called the 30-30-30-10 Rule. This regulation gives a straightforward but effective structure for people to manage their mortgage budget well and secure financial steadiness over time.

Understanding the 30-30-30-10 Rule

Grasping the rule means breaking down the important parts necessary for budget management. This principle advises putting aside 30% of your salary for housing loan instalments to ensure payments are made on schedule. Another 30% goes to daily living costs, such as food shopping and household bills.

Putting away 30% into savings and investments helps money increase, making sure there is support for what’s needed in the future by spreading out where you invest. Finally, 10% is put aside for optional expenses, which lets you enjoy some treats now and then without affecting your financial security. Here’s how it is divided:

  • 30% for home loan EMI
  • 30% for living expenses
  • 30% for savings and investments
  • 10% for discretionary spending

Let’s delve deeper into each component:

Allocating 30% for Home Loan EMI

The financial commitment towards your EMI often commands the lion’s share of your budget. Allocating 30% of your earnings to this obligation ensures smooth repayment without undue strain.

Opting for a loan with favourable terms and minimal interest rates becomes paramount to maintaining manageable monthly payments, thus alleviating undue pressure on your financial resources.

Budgeting 30% for Living Expenses

The following portion, which is 30% of your earnings, is set aside for daily expense needs. It covers important things like food shopping, household bills, travel costs, and medical care. When you set aside a certain part of your earnings for daily costs, it helps to keep a good quality of life without spending too much or using money from your savings.

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Saving and Investing 30% for Financial Growth

Allocating 30% of your earnings to savings and investments forms a solid foundation for future financial stability and expansion. You can use this part of your budget to create a fund for emergencies, put money into shares, bonds, or collective investment schemes, and set aside savings for retirement or other objectives you plan to achieve after many years. Regularly putting money into your future makes sure you are ready for unexpected costs and can have a relaxed time when you retire.

Allowing 10% for Discretionary Spending

The last 10% of your money is for you to spend as you like on things that are not necessary, like going out to eat, activities for fun, and buying fancy items. It is good to have fun in life and sometimes spend on extra things, but keeping these expenses within 10% of your budget can help keep control over money and stop you from spending too much.

Implementing the 30-30-30-10 Rule

Rajesh is a software engineer living in Bangalore, India. Every month, from his salary, which is 60,000 INR, Rajesh puts aside 18,000 INR, which makes up 30%, to pay for the loan he took for his house. This helps him make payments when they are due and does not put too much pressure on how much he spends.

Another 18,000 INR, which is 30% of his income, is used for living costs like house rent, buying food items, and paying service bills. Every month, Rajesh carefully puts away the same amount of money into savings and invests it in mutual funds and fixed deposits. With the last 6,000 INR, which is 10% of the income, Rajesh has pleasures like eating in restaurants, going to movies, and following his hobbies.


Understanding how to manage the budget for your house loan is very important if you want a stable and secure financial life. The 30-30-30-10 Rule provides an easy-to-follow method for distributing your earnings smartly, putting what you need to pay first in order, and reaching your goals with money over time.

Loan experts such as CreditDharma assist you by following this principle and regularly checking and modifying your budget when necessary. With their help, you can be confident that owning a house continues to bring joy and stability instead of worries.

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