The simplest way to budget: 50% Needs, 30% Wants, 20% Savings.
Needs (50%)
Wants (30%)
Savings (20%)
Needs: Rent, Groceries, Utilities, Insurance.
Wants: Dining out, Hobbies, Netflix, Shopping.
Savings: Emergency Fund, Investments, Debt Repayment.
Enter your monthly income to generate a budget plan.
Popularized by Senator Elizabeth Warren, the 50/30/20 rule is a simple way to budget that doesn't involve complicated categories. It splits your after-tax income into three buckets.
These are expenses you cannot avoid: housing, food, transportation, and minimum debt payments.
These are discretionary expenses: entertainment, dining out, and upgrades.
This is your financial future: emergency fund contributions, retirement savings, and extra debt payments.