60% Budget Rule: Calculator, How To, & Google Sheets Resource

The 60% budgeting rule, or the 60% solution, is a common breakdown of income percentages used for budgeting. There are a few variations to the 60% budgeting solution, but each maintain 60% of your income as the largest portion.

In the 60% budget method, your income is divided up into two or more different categories, depending on the variation you choose. We’ll cover four common variations: 60/40, 60/20/20, 60/30/10, and 60/10/10/10/10.

The 60/40 budget only groups your expenses into two broad categories. 60 percent is reserved for necessary expenses like housing and food. The remaining 40 percent goes to everything else like variable more optional expenses, as well as saving and investing.

The 60/20/20 budget is a frequently used version of the 60% rule. This version breaks down your expenses into three categories. The largest 60 percent portion is still reserved for those necessary expenses. The remainder is a bit more structured, allocating 20 percent each to savings and entertainment costs.

The final common variation of the 60% rule is 60/30/10. In this budget, saving and investing is very prioritized. This is a great budget for those with higher incomes or a low debt-to-income (DTI) ratio. Instead of fixed expenses, the 60 percent portion is reserved for saving and investing. 30 percent is set for those essential costs. The remaining 10 percent is for more flexible spending.

The 60/10/10/10/10 split budget is the most specific version of the 60% rule. This version breaks down your expenses into five categories. The largest 60 percent remains for expenses. The remainder is split evenly four ways, 10% each, for various saving goals (retirement, short-term, long-term) and flexible spending.

Choose which version of the 60% budget rule you’d like to see and input your income to see how the budgets 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 each of the variations of the 60% rule that we covered here.

Make a copy of our spreadsheet and check it out!

If you’re unsure about anything pertaining to the 60% budget, check out some of these frequently asked questions.