The 50/30/20 Budget Rule

A simple budget framework that divides your after-tax income into three categories: 50% for needs, 30% for wants, and 20% for savings.

Needs (50%)
Wants (30%)
Savings (20%)

Needs (50%)

$1500

Rent, utilities, groceries, transportation, minimum debt payments, insurance

Wants (30%)

$900

Dining out, entertainment, shopping, travel, hobbies, subscriptions

Savings (20%)

$600

Emergency fund, retirement, investments, extra debt payments, future goals

How to Use This Budget

  1. Calculate your monthly after-tax income
  2. Allocate 50% to essential needs
  3. Budget 30% for personal wants
  4. Set aside 20% for savings and debt repayment
  5. Track your spending to stay within each category

Note: This is a general guideline. Adjust percentages as needed for your specific situation. High cost-of-living areas might require spending more on needs.

DISCLAIMER: This 50/30/20 budget visualization is provided for educational and informational purposes only. It is not intended to replace professional financial advice. The percentages suggested may need adjustment based on your personal circumstances, including income level, geographic location, debt obligations, and financial goals.