The 50/30/20 Budget Rule

This simple budgeting method divides your after-tax income into three categories, making it easy to manage your money and reach your financial goals.

50%
Needs
Essential expenses you can't avoid - housing, utilities, groceries, transportation, insurance, and minimum debt payments.
Examples: Rent, electricity, groceries, car payment, health insurance
30%
Wants
Non-essential spending that makes life enjoyable - dining out, entertainment, hobbies, subscriptions, and lifestyle upgrades.
Examples: Restaurants, Netflix, gym membership, shopping, vacations
20%
Savings & Debt
Building your future - emergency fund, retirement savings, investments, and extra debt payments beyond minimums.
Examples: Emergency fund, 401(k), IRA, paying down credit cards

Your Income

$

Enter your take-home pay after taxes and deductions

Your Budget Plan

Needs (50%)
$0
For essential expenses like housing, utilities, and groceries.
Wants (30%)
$0
For discretionary spending on entertainment and lifestyle.
Savings (20%)
$0
For emergency fund, retirement, and debt paydown.

Automate Your Savings

Set up automatic transfers to your savings account on payday. Paying yourself first ensures you meet your 20% savings goal consistently.

Track Every Expense

Use apps or spreadsheets to monitor where your money goes. Tracking helps identify areas where you can cut back and reallocate funds.

Review Monthly

Check your budget every month and adjust as needed. Life changes, and your budget should adapt to your current situation and goals.

Reduce High-Interest Debt

Prioritize paying off credit cards and high-interest loans. Once eliminated, redirect those payments to savings and investments.

Smart Shopping Habits

Use coupons, buy generic brands, and plan meals to reduce grocery costs. Small savings add up to hundreds of dollars annually.

Build Emergency Fund First

Aim for 3-6 months of expenses in savings. This safety net protects you from unexpected costs and prevents debt accumulation.