top of page

How to ‘50/20/30’ Your Budget

The 50/20/30 rule takes the sting out of budgeting. And it doesn’t make you track every single dollar. One way to keep yourself on track is by automating the 20% savings piece: set up transfers from checking to savings.

Sort all your expenses into three categories: Essentials, Flexibles, and Saving

The 50/20/30 budget says the ideal breakdown is this:

  • 50% of your money goes toward basic needs or essentials (mortgage, health care)

  • 20% is for the money you can use to pay for retirement and other big life goals and dreams

  • 30% goes towards flexible expenses (dinner out, travel, and vacations)


Let’s start with the 50%. These are your bare-minimum expenses that keep the lights on in your life. Literally. Because utility bills are in this category. Along with things like:

  • Rent or mortgage

  • Basic groceries

  • Insurance

  • Gas and/or public transportation costs

  • Phone and Internet

  • Minimum debt payments

Savings and Dreams

Giving this part of your budget some love might feel like a sacrifice now. But ‘future you’ will be glad you did. Your 20% should include saving for emergencies, investing for retirement, and money for other life goals and dreams, like buying a home one day or going on a dream vacation...once we can travel again.


You can spend the last 30% of your take-home pay on those things or whatever else you want: 3D puzzles, subscription boxes for your dog. No judgments. Think of this as the ‘upgrade’ category: Groceries are a need, but ordering in is a want. Replacing your winter coat is a basic need, but extra clothes shopping falls into this bucket, too.

  • Dinner out

  • Travel / Vacations

  • Fancy Clothes

Download the spreadsheet to help you organize!

27 views0 comments

Recent Posts

See All


bottom of page