Financial clarity isn’t just about managing money; it’s about nurturing relationships. Without clear budgeting, couples often face misunderstandings, resentment, and stress. This article offers insights from my extensive experience coaching Indian couples at The Richness Academy, illustrating vividly how financial rules can transform relationships.
Life Without Rules: Real-Life Chaos
Meet Rahul and Priya, a young couple from Mumbai. With no financial guidelines, they found themselves frequently fighting. Rahul spent impulsively, Priya anxiously tried to save, and both felt misunderstood. They ended every month unsure of how their money vanished, creating tension that slowly eroded their happiness.
Then there was Kavita and Arjun from Bangalore, who earned well but argued endlessly over money. Kavita’s indulgences and Arjun’s financial insecurities led to continuous friction, ultimately affecting their emotional connection profoundly.
These couples represent a common scenario: a lack of rules leading to financial chaos and emotional distress. However, with a clear financial plan, this chaos can be replaced with relief and peace, knowing that every rupee is accounted for and every need is met.
How I Conceived the 40-30-20-10 Rule
Throughout my career, I have explored numerous budgeting frameworks, including the 50-30-20 Rule and envelope budgeting. However, I found these rules often didn’t fit Indian family dynamics, responsibilities, and emotional needs.
I designed the 40-30-20-10 Rule specifically to address Indian values, obligations, and aspirations. This unique Rule strikes a balance between daily essentials, lifestyle choices, future security, and emotional fulfilment, tailored explicitly for Indian couples.
What is the 40-30-20-10 Rule?
It’s a smart, flexible budgeting method where you divide your monthly after-tax income into four clear categories:
- 40% – Household Essentials
- 30% – Lifestyle & Dependents
- 20% – Savings & Debt Repayment
- 10% – Giving, Self-Care & Other Financial Goals
Each percentage represents not just expenses but intentional living. Let’s dive into each with detailed examples and how I’ve helped couples tailor this Rule to their unique financial journeys.
40% – Household Essentials
This is your foundation—everything needed to keep your household running smoothly and safely. This category is about stability and security.
What It Covers:
- Rent or Home Loan EMI
- Groceries & Daily Needs
- Electricity, Water, Gas & Internet
- Commuting: Fuel, Metro, Cabs
- Medical Expenses & Health Insurance
Abhay and Meera from Delhi initially struggled, spending over 60% of their income on essentials, leaving little for emergencies or joy. By following my guidance, restructuring their housing costs, and adopting more innovative grocery planning, they reduced their essentials to under 40%, achieving financial stability and emotional peace.
Why This Rule Became Essential for Couples
A couple in Delhi, Abhay and Meera, had just moved into a rented flat and were overwhelmed. They spent nearly 65% of their income on fixed costs—leaving no room for emergencies, joy, or planning. This pattern left them stressed by mid-month.
Their Realisation
It was after their electricity was disconnected due to a missed bill, and they had to borrow money to pay the rent that they knew something had to change. In our session, they saw how the lack of clarity was choking their freedom.
How the Rule Helped
We evaluated their recurring expenses. By moving to a slightly smaller flat, planning groceries monthly, and bundling internet with mobile plans, they reduced their fixed costs to 39%.
What Was Unique
The shift wasn’t just logistical. Emotionally, they felt in control. Meera said, “For the first time, we weren’t afraid to look at our bank balance.” This sense of control and empowerment is a key benefit of following the 40-30-20-10 Rule.
How My Advice Made a Difference
I helped them track fixed expenses using an Excel sheet tailored for Indian bills. I even connected them with a bulk grocery delivery service that saved them ₹4,500 per month. We redirected those savings into their emergency fund.
30% – Lifestyle & Dependents
This is the portion where your life breathes. It’s the space for joy, hobbies, growth, and caring for others.
What It Covers:
- Dining Out, Movies, OTT Subscriptions
- Travel, Fitness, Personal Hobbies
- Children’s Tuition, Extracurriculars
- Support to Parents or Extended Family
Ankur and Rhea from Bengaluru constantly argued over discretionary spending. My strategy helped them segment this 30% into clear areas: 15% shared enjoyment, 10% family responsibilities, and 5% personal hobbies. Their relationship significantly improved, fostering guilt-free enjoyment and clearer priorities.
Why This Rule Became Crucial
When Ankur and Rhea approached me, their central conflict was guilt. Rhea loved her online baking courses. Ankur sent ₹10,000 monthly to his parents, but both felt the other was spending “too much.”
When They Realised Its Value
They never had categories. Every rupee spent felt like a deduction from the other’s desires. That’s when the 30% Lifestyle & Dependents Rule became their saving grace.
How It Helped
They split the 30% as follows: 15% for shared enjoyment, 10% for dependents, and 5% for personal hobbies. Suddenly, Rhea could take a course guilt-free, and Ankur’s support to his parents wasn’t seen as unfair.
What Made This Unique for Them
It created emotional equality. They weren’t just splitting money—they were aligning their values. This alignment of values is a crucial aspect of the 30% Lifestyle & Dependents Rule, making couples feel understood and respected.
My Intervention
I introduced them to a budgeting app that allows them to set individual spending caps. We even created a “fun fund” via a short-term SIP so they could plan quarterly getaways. That structure saved their marriage from resentment.
20% – Savings & Debt Repayment
This is your long-term financial oxygen. It covers security, goal planning, and becoming future-ready.
What It Covers:
- Emergency Fund (6–12 months)
- SIPs in Mutual Funds
- Child’s Higher Education Corpus
- Retirement Planning: NPS, EPF, PPF
- Home Buying or Asset Goals
- Loan Repayment: Credit Card, Vehicle, Personal
Manav and Priya from Hyderabad had no savings and faced frequent financial crises. We developed structured emergency and investment plans, ensuring automated savings from their monthly incomes. This disciplined approach enabled them to build a secure financial future, significantly reducing anxiety and stress.
Why Couples Must Prioritise This
Take Manav and Priya—mid-30s, earning well in Hyderabad. They had no loans but also no savings. Every birthday gift, medical emergency, or car repair felt like a crisis.
The Turning Point
When Manav’s mother fell ill, and they had to borrow ₹1 lakh on short notice, the fear of instability hit home.
How the Rule Changed Their Life
We began with 5% monthly to an emergency fund. Once ₹3 lakhs was saved, we shifted 10% to mutual fund SIPs and 5% to prepay a personal loan.
Why This Rule Was Unique for Them
They felt financially mature for the first time. Priya said, “It’s like we finally respected our money.”
My Role in Their Journey
I mapped their goals across time horizons. We chose equity hybrid funds for home buying and NPS for retirement. I helped automate everything post-salary credit. Now, saving wasn’t effort—it was a habit.
10% – Giving, Self-Care & Other Financial Goals
This last part is about purpose. It keeps the soul of your money alive.
What It Covers:
- Charity, Donations, Zakat
- Family Medical Help or Support
- Self-Care: Therapy, Retreats
- Gifts, Festivals, Spiritual Giving
Sahil and Leena from Pune frequently argued over festivals and family expenses. By establishing a “Joy Budget” and systematically allocating 10%, they eliminated guilt and conflict, rediscovering joy and emotional fulfilment in spending there.
Why This Rule Is So Often Overlooked
Sahil and Leena never budgeted for gifting. Every Diwali caused arguments. “Why are we giving your cousin ₹5,000?” “Didn’t we just spend on my sister’s wedding?”
Their Moment of Awakening
In a financial clarity session, we planned an annual joy budget, covering events such as Diwali, birthdays, Raksha Bandhan, therapy, and even donations.
The result?
There were no fights that year. Only joy. They stuck to ₹6,000 per month in this category and had ₹1,000 left over in December.
What Made It Special
Budgeting for love gave them emotional peace. They learned it’s okay to plan for generosity.
How I Contributed
We built a “Joy Calendar” using a shared Google Sheet. I helped them pre-plan significant expenses and set up a digital envelope system through a bank wallet. Giving became intentional, not impulsive.
Why Do Indian Couples Need This Rule?
- It creates visibility: “Where is our money going?”
- It reduces blame: “We agreed on this together.”
- It promotes partnership: “We both have a say.”
- It brings purpose: “Let’s plan our dream, not just our EMIs.”
- It builds emotional peace: “Spending feels safe and structured.”
Every couple I’ve worked with reported better communication, fewer arguments, and a deeper connection after following this Rule. It’s not just about money—it’s about meaning.
How to Begin as a Couple
- Sit down with your total monthly net income
- Apply the 40-30-20-10 Rule
- Use a tracking tool (Google Sheets, Walnut, or apps)
- Review monthly and hold money dates
- Adjust during life events (salary raise, baby, relocation)
Why This Specific Rule Resonates Deeply With Couples
- Creates Clear Financial Visibility: Couples see their money’s destination, reducing misunderstandings.
- Fosters Emotional Equality: Ensures both partners’ emotional and financial needs are equally valued.
- Encourages Shared Goals: Aligns money management with shared life goals, enhancing cooperation and intimacy.
Detailed Steps to Implement the 40-30-20-10 Rule
- Calculate Total Monthly Income
- Divide Income Clearly: 40% essentials, 30% lifestyle, 20% savings, 10% personal goals.
- Track spending Regularly using budgeting apps or spreadsheets.
- Conduct Weekly “Money Dates” for open discussions and adjustments.
Impact on Relationships: From Conflict to Harmony
Countless couples I’ve coached found significant improvements beyond financial health. Regular financial clarity reduces conflicts, increases trust, and enhances emotional bonds.
For instance, Kavita and Arjun, as mentioned earlier, found peace and mutual respect after embracing this structured approach. They now use weekly discussions to celebrate achievements, aligning their financial strategies and emotional connections.
Conclusion: Money as a Connector, Not a Divider
The 40-30-20-10 Rule offers Indian couples more than financial structure—it provides emotional stability, clarity, and unity. Embracing this budgeting framework transforms relationships, turning money management from a source of stress to a foundation of partnership and joy.
Final Words: Money Can Unite, Not Divide
I’ve seen couples on the verge of separation come back together after implementing this framework. Why? Because it does more than control money. It builds trust, clarity, and connection.
So, if you’ve ever asked:
- “Why are we always broke?”
- “Why do we fight about expenses?”
- “How can we plan our dreams together?”
…then the 40-30-20-10 Rule is your answer.
Let money be a bridge—not a barrier.
The author of this article, Taresh Bhatia, is a Certified Financial Planner® and advocate for female empowerment. For more information and personalized financial guidance, please contact taresh@tareshbhatia.com
He has authored an Amazon best seller-“The Richness Principles”. He is the Coach and founder of The Richness Academy, an online coaching courses forum. This article serves educational purposes only and does not constitute financial advice. Consultation with a qualified financial professional is recommended before making any investment decisions. An educational purpose article only and not any advice whatsoever.
©️2025: All Rights Reserved. Taresh Bhatia. Certified Financial Planner®
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