The 70 10 10 10 rule is a budgeting framework designed to help individuals manage their finances effectively. It suggests dividing monthly take-home income into four categories: 70% for regular expenses like rent and groceries, 10% for long-term investments, 10% for short-term savings and emergencies, and 10% for debt repayment or self-development. This method aims to assign a purpose to every rupee, preventing income from vanishing quickly after payday and promoting financial stability.