A simple monthly framework that tells your money where to go before it disappears.
Most people who feel stuck in a paycheque-to-paycheque cycle are not reckless spenders. They earn reasonably, pay their bills on time, and still find that there is nothing left at the end of the month. The problem is usually not income alone. It is the absence of a simple structure that tells your money where to go before it disappears.
The 70/10/10/10 formula is one such structure. It is not a magic fix or a hard rule, but it gives you clear guardrails that make day-to-day decisions easier.
Here is how it works, and why it can help.
What the 70/10/10/10 formula actually means
Think of your monthly take-home income as being divided into four buckets.
Seventy percent is for living expenses. This includes rent, groceries, utilities, transport, insurance premiums, school fees, and everyday spending. This bucket covers life as it is today.
Ten percent is for long-term investing. This is money meant for wealth creation over years, not months. Equity mutual funds, retirement accounts, or any disciplined long-term investment fits here.
Ten percent is for short-term savings. This is your safety and flexibility money. Emergency funds, upcoming expenses like travel, appliances, or medical buffers belong in this bucket.
The final ten percent is for debt repayment or personal growth. Depending on your situation, this could go toward closing high-interest loans, building a skill, or even therapy or education that improves future earning capacity.
The power of the formula is not in the numbers themselves, but in the fact that every rupee gets a job.
Why this helps break the paycheque-to-paycheque loop
When all your income goes into one account and expenses are paid first, savings become optional. Optional savings usually get postponed. The 70/10/10/10 approach flips this around. It forces you to decide, in advance, how much of your income is allowed to be spent.
If your expenses consistently exceed 70 percent, that is not a failure. It is information. It tells you that either your lifestyle is ahead of your income, or your income needs to rise. Without a framework, this reality often stays hidden.
Over time, the two ten-percent savings buckets create breathing room. Even modest investing builds momentum. Even a small emergency fund reduces panic spending on credit cards or loans.
How to start if the numbers feel impossible
Most people cannot jump straight to this split in one month. That is normal.
Start by tracking one full month of expenses honestly. Then see where you stand today. You may be spending 85 percent on living costs, saving 5 percent, and winging the rest.
From there, move gradually. Shift two or three percent at a time. Cut one recurring expense. Increase one SIP. Redirect one bonus or raise fully into savings. Progress matters more than precision.
A quiet benefit people overlook
The formula also reduces mental fatigue. Once the buckets are defined, small decisions become easier. You know what can be spent guilt-free and what should not be touched. This clarity often does more for financial peace than chasing higher returns.
Living paycheque to paycheque is rarely about discipline alone. It is about having a system that works even when motivation runs low. The 70/10/10/10 formula is not perfect, but for many people, it is a practical place to begin reclaiming control.
