The main point of this rule is that it should be flexible depending on your needs and encourage you to save at least a little something every month. If 50% does not cover your living expenses, which is unfortunately the case for many people, then you can take some from your “wants” money, or even your savings, if necessary. Now split that three ways according to the 50-30-20 rule. Ok, so let’s say you get paid approximately $1,200 twice a month.

If there’s any extra money left over, you can roll it over to the next month, or just put the rest into more savings! This method is super easy to follow! Simply calculate your monthly income (or bi-monthly if you prefer) and divide it three ways:ĥ0% goes towards your needs, such as housing costs, utility bills, groceries, loans, and any other mandatory expenses.ģ0% goes towards your personal wants, such dining out, entertainment, traveling, streaming services, and other subscriptions.Ģ0% goes to your savings, whether it’s a savings account, retirement fund, or other investments.Īfter you determine how much money goes towards each category, you can track your spending throughout the month. One way to do this effectively is by using the 50-30-20 rule. Many experts agree that one simple way to budget is to divide your income into three parts: your needs, your wants, and your savings. If you think it will work for you, you can even download our printable MAJORITY monthly budget worksheet for free. We’ll go over how to budget using the 50-30-20 rule, plus give you examples. The hardest part is always sticking to it.īut whether you’re new to budgeting or simply looking for a method that works for you, the 50-30-20 budget rule works for nearly everyone no matter what their income, and it’s easy to follow! Budgeting can be as easy or complex as you want to make it. A budget is a financial plan you can use to better organize and manage your money by calculating your income and expenses.

Simple budget form