The 75/10/15 Rule: How to Manage Your Money Like the Wealthy (No Matter How Much You Make)

If you’ve ever wondered how wealthy people manage their money — even those who started with very little — there’s a simple, yet powerful rule that could change the way you think about personal finance. It’s called the 75/10/15 Rule, and the best part? It works no matter how much you earn. Whether your income is $10,000 a year or $1 million, this rule helps you spend smarter, build a safety net, and grow real wealth.

PERSONAL FINANCE

By ONE RUPEE

4/6/20252 min read

Step 1: Spend No More Than 75% of What You Earn

For every dollar you make, only 75 cents should go toward your lifestyle and expenses. That includes:

  • Rent or mortgage

  • Food and groceries

  • Transportation

  • Vacations

  • Even that $5 iced coffee or new gadget

Why 75%?

  • It gives you flexibility without restricting enjoyment.

  • It trains you to prioritize value over price.

  • It helps you develop frugal habits — something even millionaires practice.

In fact, the wealthiest people often look for deals, ask for happy hour menus, and even split bills down to the last cent — not because they have to, but because they understand how to protect their wealth.

And here’s a truth bomb: big-ticket purchases (like fancy cars or 100-inch TVs) often bring only short-term happiness. After the honeymoon phase, they become just another thing.

Step 2: Save 10% For a Cushion Fund

This 10% is your safety net — not for travel, dining, or impulse cravings, but for real emergencies:

  • Medical issues

  • Car accidents

  • Sudden job loss

  • Unexpected repairs

How Much Should Be in Your Cushion Fund?

  • Add up your monthly expenses

  • Multiply that by 5 months

For example, if you spend $2,000 a month, your cushion fund should be $10,000.

Once you hit your cushion goal, stop saving in that category and move on to investing.

Also, keep this fund in a high-yield savings account (HYSA) instead of a traditional one — your money grows much faster with interest rates up to 4% APY compared to 0.5% from traditional banks.

Step 3: Invest 15% to Build Wealth

The final 15% should go toward investments. Why? Because:

“Real wealth isn’t built from labor — it’s built from owning assets.”

This mindset shift is what separates people who just make money from those who grow it.

Start With These Two Accounts:

  1. Roth IRA

    • Contributions are made with after-tax income

    • Earnings grow tax-free

    • 2024 limit: $7,000 (or $8,000 if over 50)

  2. 401(k)

    • Offered through employers

    • Contributions made pre-tax

    • 2024 limit: $23,000

    • Often includes employer matching (aka free money)

💡 Pro Tip: Don’t just transfer money into these accounts — you need to invest it within the account.

What to Invest In?

The simplest and most effective option: Index Funds or ETFs.

Why Index Funds?

  • Diversification (spread across 500+ companies)

  • Lower risk

  • Long-term returns of 8–10% annually

  • Set it and forget it approach

Examples:

  • VOO – S&P 500 Index

  • FXAIX – Fidelity’s S&P 500 Index Fund

Final Thoughts

This 75/10/15 rule might seem simple — because it is. But when applied consistently, it creates the foundation for long-term financial freedom.

TL;DR Recap:

  • ✅ Spend no more than 75%

  • ✅ Save 10% in a cushion fund

  • ✅ Invest 15% to build assets

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