A Beginner’s Guide to the 50/30/20 Budget Rule

Whether you’ve struggled to manage your personal finances consistently in the past or you’re looking to find a less time-intensive method, the 50/30/20 budgeting system might be the approach you need to stop struggling and finally make your budget stick.

What is the 50/30/20 Rule?

The 50/30/20 system was designed to make budgeting more accessible to people who get overwhelmed by complicated spreadsheets and budgeting apps. It was popularized by Senator Elizabeth Warren in her book All Your Worth: The Ultimate Lifetime Money Plan.

Users of the system divide their transactions into just three buckets: needs, wants, and debt payments/savings. Spending is broken up into 50% for needs, 30% for wants, and 20% for savings and debt. Groceries would be in the needs group, makeup would be a want, and student loan bills would be a debt payment.