The 75-15-10 Plan
Cap spending, invest first, and preserve a cash buffer
- Difficulty
- Easy
- Time to result
- ~months to results
- Steps
- 4
- Confidence
- 99%
Singh's 75-15-10 plan assigns every dollar a job before lifestyle spending expands. No more than 75% of income funds housing, food, transport, holidays, and every other expense. At least 15% goes to investments and at least 10% goes to savings. The spending bucket is deliberately broad: one person may favor a larger home while another chooses a costly car or travel, but all preferences must fit the same ceiling. The mechanism creates recurring capital for future wealth and a cash reserve while limiting lifestyle inflation. Singh presents it as a rule of thumb rather than an individualized prescription. Someone in his financial danger zone may first need sharper cuts and debt reduction rather than treating these percentages as immediately sufficient.
Origin
Extracted from The Diary of a CEO
Core principles
- 01Spending has a ceiling, not a target
- 02Investing and saving precede discretionary spending
- 03Lifestyle choices compete within one allowance
How to run it
- 1
Measure income
Calculate the income available over one recurring period.
Pro tip Use a consistent monthly or payday basis.
- 2
Reserve investment capital
Move at least 15% toward long-term investments before optional purchases.
Pro tip Automate the transfer where practical.
Watch out The episode does not specify suitable products or individual risk levels.
- 3
Reserve savings
Place at least 10% into savings for liquidity and future needs.
Pro tip Keep emergency cash separate from investment cash.
- 4
Fit life inside 75%
Pay every recurring and discretionary cost from no more than the remaining 75%.
Pro tip Trade among preferences instead of breaching the cap.
Watch out Do not hide debt-financed spending outside the calculation.
In the wild
Singh uses a $100,000 income to illustrate the rule. Total annual spending can be no more than $75,000. A mortgage fits only if the mortgage, food, holidays, and every other cost remain within that amount while investing and saving continue.
→ The house is judged against the whole financial system rather than a lender's approval alone.
Common mistakes
Treating 75% as housing money
The allowance must cover the entire lifestyle, not only rent or the mortgage.
Investing whatever remains
Waiting until after spending makes the 15% unreliable.
Is it for you?
Best for
It is best for earners who need a simple default allocation before making detailed spending choices.
Not ideal for
It is not ideal as a rigid immediate target for someone whose essential costs already exceed 75% of income.
From the transcript
“75 cents is the maximum that you can spend”
“15 cents is the minimum that you invest”
“10 cents is the minimum that you save”
From the episode
The Savings Expert: Are You Under 45? You Probably Aren’t Getting A Pension! Do Not Buy A House! This Is Probably Why You’re Broke! - Jaspreet Singh