50/30/20 Budget Rule: Calculator, How To, & Google Sheets Resource

One of the most common percentage-based budgets is the 50/30/20 budget, also known as the “50/30/20 Rule of Thumb”.

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 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.

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.

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!

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.