The 50-30-20 Budget Rule

Posted by Nailah Herbert in BudgetingFebruary 12, 2020(Last Updated September 4, 2021)1 min read
Key Takeaways
  • The 50-30-20 budget splits your money into three categories. 
Are you ready to make some real money moves?

The 50-30-20 budget splits your money into the following three categories: 

1. Needs

2. Wants

3. Savings


Needs (50%)


Fifty (50%) of your income should be allocated for needs. Examples of needs are as follows:

  • Housing
  • Transportation
  • Food
  • Utilities


Wants (30%)


While you should take care of your needs first, you should also enjoy the fruits of your labor. For this reason, the 50-30-20 budget allocates 30% of your income to your wants.  Examples of wants are as follows:

  • Shopping
  • Entertainment
  • Subscriptions
  • Eating out


Savings (20%)


Twenty (20%) of your budget is for savings or debt payments. Examples of what should be paid with this 20% of your budget include the following:

  • Building your emergency fund
  • Repaying loans, such as credit cards or student loans




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