Simplify Your Personal Finances with the 50/30/20 Budget

I know what you’re thinking…not another budgeting article…I get it already; I know how to budget!

Sure you know how to budget, but do you actually do it?

Is your budget so complicated that it overwhelms you?

In many cases, the answer to those questions are no and yes, respectively. People have such complicated budgets and hold themselves so accountable to following them that they often never even end up budgeting at all!

This happened to me when I first started budgeting, so I adopted something much more simple than most budgets I have read about: the 50/30/20 Budget.

What is the 50/30/20 Budget?

It’s quite simple actually.

1) Put 50% of your take home income (doesn’t include taxes, health insurance, etc.) towards your absolute necessities. You know, the things you need to pay: rent/mortgage, utilities, transportation, and so on.

2) Put 30% of your take home income towards whatever you’d like. This may include going out, buying new clothes, taking a trip, etc.

3) Put the last 20% towards savings and/or repaying debts. If you have tons of debt, perhaps if you are a lucky recent graduate paying off a hefty student loan, you may need to up this category a little, or even switch it with the “30” category.

How to Implement the 50/30/20 Budget

So you have a budget made, but how do you make sure you actually follow it?

Track it!

Yes, the most important part of any budget is too track it. Like many other things, budgeting sounds good in theory, but until you actually hold yourself accountable and follow it will it do anything for you.

You can use apps like You Need a Budget or Mint, spreadsheets, or some good old fashioned pen and paper. If the 50/30/20 split isn’t working for you, feel free to adjust the categories as necessary.


What budgeting method do you guys prefer? Something more complicated, more simple? Any 50/30/20 budgeters like myself out there?


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