How to Budget Your Money: A Real Story That Will Change How You Think About Your Salary

Let me tell you about my friend Simon.

34 years old. Decent guy. Works hard. Earns ₹70,000 a month — which, honestly, is more than what most people his age are making in this country.

And yet. Every single month, without fail, the last week of the month arrives and Simon’s phone starts ringing. Not work calls. Not family calls.

It’s him. Calling us. His friends. Asking if anyone can lend him two, three, maybe five thousand rupees until salary day.

We used to think it was a rough patch. One bad month. Unexpected expense. It happens to everyone, right? Except it happened every month.

Month after month after month.

At first, it didn’t feel like a big deal—we would laugh it off whenever he ran out of money and asked us for help. But after it kept happening almost every month, the pattern became too obvious to ignore. By the fourth or fifth time, it stopped being funny and started feeling like a real concern. We realized he wasn’t just having a bad month, he was stuck in a cycle.

Now here is what makes Simon’s situation genuinely painful to watch. He is not a poor man. He is not struggling with an unfair salary. ₹70,000 a month is serious money. That is ₹8.4 lakh a year. More than most Indian households see combined.

So where is it all going?

I asked him once. He shrugged. “Expenses ho jaate hain yaar. Life expensive hai.”

That answer told me everything. Simon did not have a money problem. Simon had a budgeting problem. And there is a massive, life-changing difference between the two.

The Real Breakdown of Simon’s ₹70,000

I am not sharing this to embarrass him — he knows I write about this stuff and was okay with me using his example. But I want you to see his numbers because I guarantee you will recognize something of yourself in them.

Here is roughly where his money goes every month:

Rent — ₹35,000. Yes. Thirty-five thousand rupees for a rented flat. That is 50% of his entire salary gone before the month even begins. And the furniture inside that flat? Also rented. So he is paying monthly for furniture he will never own, inside a home he will never own.

Daily family dinners out — Simon’s wife does not cook much at home. No judgment — but eating out as a family daily in a decent restaurant in any Indian city easily costs ₹800 to ₹1,200 a meal. That is ₹24,000 to ₹36,000 a month. On food alone.

Gadgets — New phone every year. Wireless earphones. Smart watch. A tablet he barely uses. The latest everything. Because looking successful feels almost as good as being successful. Almost.

Wife’s expenses— She is a full-time mother to their baby girl, which is a real job. But with no budget conversation happening at home, her spending is also completely untracked.

By the time you add it up — rent, food, gadgets, baby expenses, subscriptions, random purchases — Simon is spending somewhere between ₹75,000 and ₹80,000 on a ₹70,000 salary.

He is not broke. He is bleeding.

When I actually sat down and roughly calculated his monthly expenses, I was honestly a bit shocked. Even he went silent for a moment—he had never really added everything up before. The biggest leaks were clearly his rent and daily lifestyle spending.

Why Smart People Like Simon End Up Here

Before we get into the how-to, I want to spend a moment on the why. Because Simon is not stupid. He is not irresponsible in his heart. He is actually a caring father and a hardworking professional.

So how does a smart person end up borrowing money from friends on a ₹70,000 salary?

Nobody taught us this. Think about it honestly. In school, we learned algebra, history, and how to write essays in formats we have never used since. Not one class on how to manage the salary we would spend our entire adult lives earning.

Lifestyle inflation is silent. When Simon got his first job, he earned ₹25,000. He managed. Then he got promoted. Salary went up. Lifestyle went up with it — faster, actually. And then faster again. This is called lifestyle inflation and it is the most common financial trap educated, earning people fall into.

The showoff trap is real and expensive. The flat that is too big. The rented furniture that looks impressive. The dinners out that fill Instagram stories. None of this is purely evil — humans are social creatures and we want to look okay in front of others. But when the performance of success is costing you your actual financial security, something has gone badly wrong.

One income, two spenders, zero budget conversation. Simon earns. His wife spends — because they have never sat down and decided together what the plan is. This is not a blame game. This is just what happens when a household has no shared financial agreement.

Honestly, I would be lying if I said I’ve never done something similar, even if on a smaller scale. There have been times I’ve spent a bit extra just for comfort or to maintain a certain image. The difference is, I realized early that if it’s not controlled, it can easily turn into a habit.

Okay. So What Does a Budget Actually Fix?

Let us get practical now.

A budget does not shrink your life. That is the biggest lie people believe about personal finance.

A budget gives every rupee a job. That is it. Simple as that.

Right now, Simon’s ₹70,000 has no job description. It just arrives and starts disappearing — to rent, to restaurants, to Amazon checkout pages, to rented furniture EMIs — until it is gone. And then Simon is confused about where it went.

A budget says: okay, ₹70,000 is coming in. Here is exactly where each portion goes. On purpose. By choice. Not by accident.

When you do that, two things happen immediately.

First, you stop feeling guilty about spending. Because the spending you planned for is guilt-free — it is in the budget. You chose it.

Second, you stop being surprised at the end of the month. Because you already knew what was coming.

Step 1 — Write Down Your Real Income

Not your CTC. Not your gross. The actual number that lands in your account.

For Simon, that is ₹70,000. Clear. Simple. That is the number we work with.

If your income varies — freelance work, business income, gig work — take the average of your last three months. Use that as your base.

Write the number down right now. Seriously. On your phone, in a notebook, anywhere. The act of writing it makes it real.

Step 2 — List Every Place Your Money Goes (Be Brutally Honest)

Open your bank app. Go through last month’s transactions. Every single one.

Write down every category of spending. Rent. Groceries. Dining out. Fuel. Subscriptions. EMIs. Online shopping. Everything.

Do not skip something because it embarrasses you. The point here is awareness — not shame.

When Simon did this exercise, he found three Zomato transactions in a single day on multiple occasions. He found a gym membership he had not used in four months. He found two OTT subscriptions running simultaneously when he only actively used one.

This list — ugly as it might be — is the most powerful financial document you will ever create. Because you cannot fix what you cannot see.

For Simon, the biggest shock came from his daily eating-out expenses. He had always seen it as a normal part of his routine—grabbing dinner outside, ordering food, or going out with family didn’t feel like a financial decision at all. But when we added it up for the entire month, the number was surprisingly high. That’s when it hit him that what felt like small, regular spending was actually one of the biggest reasons his money was running out.

Step 3 — The 50/30/20 Rule: The Only Budget Framework a Beginner Needs

There are complicated budgeting systems out there. Zero-based budgeting. Envelope method. Fifty different spreadsheet templates.

Ignore all of them for now.

Start with the 50/30/20 rule. It is simple enough to actually use and powerful enough to actually work.

Here is how it breaks down:

50% — Needs (The Non-Negotiables)

Half your income goes to things you genuinely cannot live without.

– Rent or home loan EMI

– Groceries (actual groceries — not restaurants)

– Electricity, internet, phone bills

– Transport to work

– Basic insurance

For ₹70,000, that means ₹35,000 maximum for needs.

Here is Simon’s immediate problem — his rent alone is ₹35,000. That is 100% of his needs budget before he buys a single vegetable or pays a single bill. This is what we call a structural problem and it needs a structural solution — which we will get to.

30% — Wants (The Enjoyment Money)

Thirty percent goes toward the things that make life enjoyable but are not survival.

– Eating out and ordering in

– Entertainment — movies, OTT, outings

– Shopping for clothes, gadgets, lifestyle items

– Hobbies and personal interests

– Weekend plans and travel

For ₹70,000, this is ₹21,000 per month.

Notice this is not zero. A budget that feels like punishment will be abandoned within two weeks. The 30% is your guilt-free zone — spend it on whatever you genuinely enjoy, without apology.

But it is ₹21,000. Not ₹40,000.

20% — Savings and Future (The Wealth-Building Money)

Twenty percent goes directly toward your future.

– Emergency fund

– Investments — mutual funds, SIP, PPF

– Paying down debt faster

– Saving for a specific goal

For ₹70,000, that is ₹14,000 every month going toward your future.

In one year, that is ₹1,68,000. In five years — with even basic investment returns — that becomes something genuinely meaningful.

So for Simon, an ideal 50/30/20 split on a ₹70,000 income would look like: around ₹35,000 for needs, ₹21,000 for wants, and at least ₹14,000 going into savings. But his current reality is completely different—he’s spending ₹35,000 on rent alone, and another ₹25,000–₹30,000 on food, outings, and lifestyle. Savings? Practically zero. The gap isn’t small, but the good part is—it’s completely fixable with the right decisions.

Step 4 — The Conversation Simon Needs to Have With His Wife

This step does not appear in most budgeting guides. But it is the most important one for Simon — and for anyone who shares their financial life with a partner.

A budget only works if both people in a household are working from the same plan.

Right now, Simon earns and his wife spends — not because she is irresponsible, but because they have never sat down and agreed on what the plan is. She does not know what their monthly limits are. She is not making bad decisions deliberately — she simply has no information to make good ones.

The conversation is simple. Sit down together — not during a fight, not at the end of a stressful month. A calm Sunday morning works. Share the actual numbers. Income, expenses, what is left. Then agree together on what each category limit should be.

When both partners own the budget, it stops being a restriction one person imposes on the other. It becomes a shared goal.

I’ve tried having this conversation with Simon more than once. Every time, he agrees in principle and says things should improve, but somehow the pattern repeats. At one point, he even mentioned that with family and lifestyle, it’s hard to cut down expenses. That’s when I realized the real challenge isn’t income or expenses—it’s the mindset and habits built over time.

Step 5 — The Structural Fix Simon Actually Needs

Let us talk about what the numbers are really saying.

Simon cannot budget his way out of a ₹35,000 rent on a ₹70,000 salary. That math does not work no matter how disciplined he becomes with restaurants and gadgets.

The 50/30/20 rule says needs should be maximum 50% of income. His rent alone is 50%. That means he needs to either increase his income or reduce his rent — there is no third option.

This is the hard conversation that feels uncomfortable but is genuinely necessary.

Could they find a good flat for ₹20,000 to ₹22,000? In most Indian cities — yes. It would mean a smaller space or a slightly less premium location. But it would free up ₹13,000 to ₹15,000 every single month.

That is ₹1.5 lakh a year. Just from reconsidering the rent decision.

The rented furniture is another easy fix. Return it. Buy second-hand or budget furniture. The monthly saving is immediate.

The daily restaurant dinners — could three of those seven nights become home-cooked meals? That alone could save ₹8,000 to ₹10,000 a month.

None of these changes destroy quality of life. They just redirect money from performance to actual financial security — which, by the way, reduces stress far more than a nice flat does.

Step 6 — Pay Yourself First. Every Single Month.

Here is the habit that separates people who build wealth from people who wonder where it went.

On the day your salary arrives — before you pay any bill, before you buy anything, before you even think about the month ahead — transfer your savings amount to a separate account.

A separate account. Not the same account as your spending money.

This is called paying yourself first. And it works because of simple psychology — money you cannot easily see, you do not easily spend.

For Simon, even starting with ₹5,000 a month into a separate savings account would be transformational. That is ₹60,000 in a year. For someone who currently saves zero, that is infinite improvement.

Set it up as an auto-transfer. The same day as your salary credit. Make it automatic so it requires no willpower.

Step 7 — Check In Once a Week. Just 15 Minutes.

A budget is not a one-time document. It is a living system.

Every week — Sunday morning works well — spend fifteen minutes asking yourself three questions:

How much did I spend this week in each category? Am I on track for the month? Did anything unexpected come up that I need to adjust for?

Fifteen minutes. That is it. You are not becoming an accountant. You are just staying aware.

personally use a simple Google Sheet to track everything—nothing complicated, just basic categories and monthly totals. I even set up a similar sheet for Simon and shared it with him. Whether he updates it consistently… that’s still a work in progress.

What Actually Changes When You Budget

I want to be honest with you here.

Budgeting does not make money problems disappear overnight. Simon is not going to go from borrowing money from friends to building wealth in thirty days.

But here is what does change — quickly.

The anxiety drops. Most money anxiety is not about the number in your account. It is about the uncertainty of not knowing where things stand. The moment you have a plan — even an imperfect one — the anxiety gets smaller. Because uncertainty is more stressful than difficult reality.

The fights reduce. Most couple fights about money are actually fights about the absence of a plan. When there is a shared budget, there is a shared language. “We agreed on ₹21,000 for lifestyle this month” is a much calmer conversation than “you always spend too much.”

Small wins start compounding. The first month you end with even ₹2,000 left over instead of borrowing ₹5,000 — that feeling is different from anything a new gadget can give you. Because it is real. It is progress. And it builds on itself.

**Honestly, I just want Simon to experience what financial peace actually feels like. Imagine going through the entire month without that stress of running out of money or depending on others. If he stays disciplined for even one year, he can build savings, reduce pressure, and live with much more confidence. It’s not about earning more—it’s about finally feeling in control.

Start Here: Your 5-Step Action Plan for This Weekend

Do not wait for next month. Do not wait for a better time.

This weekend — two hours, maximum — do these five things:

• Write down your actual take-home salary. The real number.
• Open your bank app and list every category you spent money on last month. Add them up.
• Calculate the gap — income minus expenses. Face the number honestly.
• Apply the 50/30/20 rule. Write what your ideal split looks like on paper.
• Open a separate savings account today and set up an auto-transfer for even a small amount on your next salary date.

That is your entire starting point. No fancy software. No financial advisor. No complicated system.

Just clarity. And a plan.

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The Last Thing I Want to Say

Simon is a good person. He works hard, he loves his daughter, he is generous with his friends — sometimes literally with money he does not have.

But I want better for him than borrowing ₹3,000 from someone at 34 years old on a ₹70,000 salary.

And I want better for you too — whatever your number is, whatever your Simon moment looks like.

The difference between people who build financial peace and people who stay stuck is rarely intelligence or income. It is almost always the presence or absence of a plan.

You now have the plan.

I’ve shared most of this with Simon, and like many of us, he knows it makes sense—but acting on it is the real challenge. I’m hoping he takes at least one step this week, even if it’s just tracking his expenses. And if you’re reading this, maybe it’s a small sign for you as well to take a closer look at your own numbers. If this resonated with you, I’d genuinely like to hear your thoughts or experiences—feel free to share.

Disclaimer: The information on this page is for educational purposes only and does not constitute financial, investment, or tax advice. Always do your own research and consult a SEBI-registered financial advisor before making any investment or financial decisions. InfoBuddy does not guarantee the accuracy or completeness of this information.