What is the 50/30/20 Budget?

The 50/30/20 budgeting rule divides your money into three different categories, one with 50%, one with 30%, and the other with 20%.

  • 50% – Needs
  • 30% – Wants
  • 20% – Savings

50 percent is for the needs in your life – essential expenses. This would include anything from food to shelter, medical to transportation. Essentially anything you need to survive and make a living will fall under this category.


Next is the 30 percent section, which are your wants – discretionary expenses. This can be nearly anything that isn’t a need, but for example it can include entertainment, electronics and clothing outside of what you need. These are funds you can spend without compromising the rest of your budget.


Last is the 20 percent piece of the pie, which is dedicated to saving. Some include debt repayment in this category as well. Now, depending on your financial situation, this can be deposited into a savings account or used as a contribution into your investment account. Utilizing this method not only motivates you to save but it also gives you permission to spend some of your hard earned money as well.

50/30/20 Budget Calculator

Input your income in the highlighted field to see how the 50/30/20 budget rule would apply to you! This can be income for any range that you choose: weekly, biweekly, monthly, annual salary, etc.

50/30/20 Budget Google Sheet

Are you a spreadsheet person? Cool, us too! That’s why we’ve put together this Google Sheet resource for calculating different budgets, including the 50/30/20 rule.


Make a copy of our spreadsheet and check it out!

50/30/20 Budget Frequently Asked Questions (FAQs)

You may still have some questions about how the 50/30/20 budget works. Here are answers to some of the most frequently asked questions about the 50/30/20 budget.

What is the 50/30/20 budget?

The 50/30/20 budget is a simple way to budget your income. You divide your income into three categories: 50% for essential expenses (needs), 30% for discretionary expenses (wants), and 20% for savings and debt repayment.

How do I know if I'm following the 50/30/20 budget?

There’s no one right answer to this question. Some people use the 50/30/20 budget as a guideline, while others strictly follow it. Ultimately, it’s up to you to decide how much you want to save and how much you want to spend.

What expenses are considered ``essential`` (needs)?

Essential expenses are those that you need in order to live, such as housing, food, transportation, and healthcare. Other possible essential expenses include debt payments and saving for retirement.

What expenses are considered ``discretionary`` (wants)?

Discretionary expenses are those that you don’t need in order to live, but that you may want or enjoy. Examples of discretionary expenses include entertainment, dining out, and travel.

Is the 50/30/20 budget realistic?

The 50/30/20 budget can be realistic for some people, but it may not be possible for everyone. If you have a low income or a lot of debt, you may need to allocate at different percentages. That’s why we recommend looking into several potential budget methods to figure out what’s most effective for you.

Other Percentage-Based Budgets

70/20/10 Budget Rule

✔️ Best for those with higher expenses or lower income

80/20 Budget Rule

✔️ Best for the financially disciplined with higher expenses

60% Budget Rule

✔️ Best for those with lower fixed expenses