The 50/30/20 Budgeting Rule: A Simple Path to Financial Health
The 50/30/20 rule is a straightforward framework for allocating your income effectively toward needs, wants, and savings.
By David Green•January 22, 2026•5 min read
Understanding the 50/30/20 Rule
The 50/30/20 budgeting rule, popularized by Senator Elizabeth Warren, divides your after-tax income into three categories:
50% - Needs
Essential expenses you must pay:
30% - Wants
Non-essential spending that improves quality of life:
20% - Savings & Debt Repayment
Building your financial future:
Example Budget
For a monthly take-home pay of $5,000:
Tips for Success
Use our Savings Goal Calculator to track progress toward your financial goals.
#budgeting#personal finance#money management#savings
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David Green
Personal Finance Expert
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