The 50/30/20 Rule Explained Simply
Disclosure: This page contains affiliate links. As an Amazon Associate I earn from qualifying purchases, at no extra cost to you. Prices and availability may change, so please check them on Amazon. Learn more.
The rule splits your take-home pay roughly into needs, wants and savings.
The key points
- About half for essentials like rent and groceries.
- Around a third for personal wants.
- The rest for savings and paying down debt.
- Adjust the percentages to your situation.
Recommended product
Weekly and Monthly Finance Planner
A planner with templates for monthly budgets, savings goals and a debt plan.
Bottom line
The step you will probably feel first: about half for essentials like rent and groceries. Start with one point, check the result after a few weeks, then build on your plan.