Home
Budgeting
50/30/20 Budget Rule
Check whether your monthly spending aligns with the 50/30/20 framework — 50% on needs, 30% on wants, 20% on savings.
Calculator
About the 50/30/20 Budget Rule
What is it?
The 50/30/20 rule is a simple budgeting framework popularised by Senator Elizabeth Warren. It suggests allocating 50% of after-tax income to needs, 30% to wants, and 20% to savings or debt repayment.
When to use
Use it as a quick sanity check for your monthly budget, especially when you feel financially stretched or want to increase your savings rate.
When NOT to use
If you live in a high cost-of-living city where housing alone exceeds 50% of income, this rule won't work as-is. Adjust the percentages to suit your situation.