Are you following these Personal Finance Thumb Rules?

Strong recommendation to follow these 4 popular personal finance thumb rules to sort out your money life. However, make sure they suit your personal circumstances instead of following them blindly.


1. 50/30/20 Budgeting Rule

Please note: 20% is the MINIMUM amount you should save. Ofcourse, more the merrier :)



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2. Term Plan - 10 times of your annual income

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3. 35% Rule

Some loans like home loans and educational loans are good loans. However, other debts like credit card dues may put a strain on your finances. As a thumb rule, EMI as a percentage of your income should not exceed 35-40 percent. Anything above that might put a strain on your finances. In case your EMI is more than that, you should avoid taking any more loans.


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4. Emergency Fund

A fund to help you in case of medical emergencies, uncalled house repair, etc. And you should be able to access it immediately without attracting any penalties for untimely withdrawal.


Emergency fund = 6 * Monthly living expenses (including regular expenses, Insurance Premiums, EMIs)


While six months is the general thumb rule, it differs from case to case. For instance, those with secure jobs can look at three months of emergency money, while the self-employed or those into freelance assignments, who face higher uncertainty, can keep aside expenses that can last up to a year.




If we can help you budget, save and invest, reach us on -

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