Managing Home Expenses
Complete guide to budgeting rent, utilities, maintenance, and household costs in India
4 min read
Managing Home Expenses
Housing is typically the largest expense category. Managing it well creates room for savings and other goals.
Understanding Housing Costs
For Renters
| Expense | Typical Monthly |
|---|---|
| Rent | ₹10,000-50,000 |
| Maintenance | ₹1,000-5,000 |
| Utilities | ₹2,000-6,000 |
| Internet | ₹500-1,500 |
| Domestic help | ₹2,000-8,000 |
| Total | ₹15,500-70,500 |
For Homeowners
| Expense | Typical Monthly |
|---|---|
| EMI | ₹20,000-80,000 |
| Property tax | ₹500-2,000 |
| Maintenance | ₹2,000-8,000 |
| Home insurance | ₹200-500 |
| Repairs fund | ₹2,000-5,000 |
| Utilities | ₹2,000-6,000 |
| Total | ₹26,700-1,01,500 |
The 30% Rule for Housing
Traditional Guideline
Housing should be ≤30% of gross income
| Gross Income | 30% Housing Budget |
|---|---|
| ₹50,000 | ₹15,000 |
| ₹75,000 | ₹22,500 |
| ₹1,00,000 | ₹30,000 |
| ₹1,50,000 | ₹45,000 |
Indian Reality
In metros, 30% may be unrealistic:
- Mumbai/Delhi: Often 40-50% goes to housing
- Tier-2 cities: 25-30% achievable
- WFH era: Consider relocating for savings
Optimizing Rent
Negotiation Strategies
Before signing:
- Research market rates (99acres, MagicBricks)
- Know occupancy rates in area
- Point out any deficiencies
- Offer longer lease for lower rent
At renewal:
- Start conversation 2 months early
- Present market data
- Offer to handle minor repairs
- Mention good tenant record
Reducing Rent Burden
| Strategy | Potential Savings |
|---|---|
| Roommate | 40-50% |
| Smaller place | 20-30% |
| Further location | 15-25% |
| Longer lease | 5-10% |
| Less fancy building | 10-20% |
Managing Utilities
Electricity Optimization
High consumers:
- Air conditioner: 40-60% of bill
- Geyser: 10-20%
- Refrigerator: 10-15%
- Washing machine: 5-10%
Reduction strategies:
| Action | Monthly Savings |
|---|---|
| AC at 24°C vs. 18°C | ₹500-1,500 |
| Timer on geyser | ₹200-500 |
| LED lights | ₹100-300 |
| Efficient appliances | ₹200-500 |
| Unplug electronics | ₹50-150 |
Water Management
- Fix leaks immediately
- Shorter showers
- Full loads in washing machine
- Rainwater harvesting (long-term)
Gas/LPG
- Use pressure cooker
- Cover pans while cooking
- Maintain burners
- Consider induction for some cooking
Home Maintenance Planning
Annual Maintenance Budget
For homeowners: Rule of thumb: 1-2% of home value annually
| Home Value | Annual Maintenance Budget |
|---|---|
| ₹50 lakh | ₹50,000-1,00,000 |
| ₹1 crore | ₹1,00,000-2,00,000 |
| ₹2 crore | ₹2,00,000-4,00,000 |
Monthly Maintenance Sinking Fund
Example: ₹1 crore home
- Annual budget: ₹1,50,000
- Monthly saving: ₹12,500
Common Maintenance Costs
| Item | Frequency | Estimated Cost |
|---|---|---|
| Painting | Every 3-4 years | ₹40,000-80,000 |
| AC servicing | Twice yearly | ₹2,000-4,000 |
| Plumbing repairs | As needed | ₹2,000-10,000 |
| Electrical | As needed | ₹1,000-5,000 |
| Pest control | Quarterly | ₹4,000-8,000/year |
| Water tank cleaning | Twice yearly | ₹1,000-2,000 |
| Appliance repairs | As needed | Variable |
Domestic Help Budget
Typical Costs (Metro Cities)
| Service | Monthly Cost |
|---|---|
| Part-time maid (cooking) | ₹4,000-8,000 |
| Part-time maid (cleaning) | ₹2,000-5,000 |
| Full-time maid | ₹12,000-25,000 |
| Cook | ₹5,000-12,000 |
| Driver (full-time) | ₹15,000-25,000 |
| Nanny | ₹15,000-30,000 |
Optimization Strategies
- Share: Split maid between two families
- Part-time: 2-3 hours vs. full day
- Train: Teach specific methods, reduce time
- Combine: Cooking + cleaning by one person
Annual Costs to Budget
| Item | Amount |
|---|---|
| Monthly salary × 12 | Base |
| Diwali bonus (1 month) | +8% |
| Other festival bonuses | +4% |
| Annual increment | +10% |
Buying vs. Renting Analysis
Simple Comparison
Monthly cost comparison:
| Renting | Buying |
|---|---|
| Rent: ₹30,000 | EMI: ₹50,000 |
| Utilities: ₹5,000 | Utilities: ₹5,000 |
| Maintenance: ₹3,000 | |
| Property tax: ₹2,000 | |
| Total: ₹35,000 | Total: ₹60,000 |
Hidden Costs of Buying
- Registration (5-7% of value)
- Stamp duty (5-7%)
- Interior work (₹5-20 lakh)
- Furniture (₹3-10 lakh)
- Society formation costs
The 3-5 Year Rule
Generally, buying makes sense only if staying 5+ years in same location.
Setting Up a New Home
One-Time Setup Costs
| Category | Budget Range |
|---|---|
| Security deposit (rent) | 2-3 months rent |
| Furniture | ₹50,000-3,00,000 |
| Appliances | ₹50,000-2,00,000 |
| Kitchen setup | ₹20,000-50,000 |
| Curtains/decor | ₹15,000-50,000 |
| Electronics | ₹30,000-1,00,000 |
| Total | ₹1,65,000-7,00,000 |
Phased Setup Strategy
Month 1 (Essentials):
- Mattress and bed
- Basic kitchen items
- Refrigerator
- Washing machine
Month 2-3:
- Seating (sofa/chairs)
- Dining setup
- Storage
Month 4-6:
- TV and entertainment
- Decor items
- Additional furniture
Sample Housing Budgets
Bachelor in Metro (₹60,000 income)
Housing Budget (35%): ₹21,000
├── Rent (sharing): ₹12,000
├── Utilities: ₹2,500
├── Internet: ₹800
├── Maintenance: ₹1,500
├── Cleaning help: ₹2,000
└── Home supplies: ₹2,200
Family of Four (₹1,50,000 income)
Housing Budget (30%): ₹45,000
├── Rent: ₹28,000
├── Maintenance: ₹3,500
├── Utilities: ₹5,000
├── Internet: ₹1,000
├── Maid: ₹6,000
└── Home supplies: ₹1,500
Key Takeaways
- Target 25-30% of income for housing
- Negotiate rent annually with market data
- Optimize utilities — AC and geyser are biggest consumers
- Create maintenance fund — 1-2% of home value annually
- Plan domestic help costs including bonuses
- Phase new home setup — Don’t buy everything at once
Next: Budgeting for Transportation — Managing vehicle and commute costs.