Plan your monthly budget using the 50/30/20 rule — needs, wants, and savings — and see exactly where your money goes.
Frequently Asked Questions
What is the 50/30/20 budget rule?
The 50/30/20 rule is a simple budgeting framework: 50% of your after-tax income goes to needs (housing, food, transport, utilities), 30% to wants (dining, entertainment, hobbies), and 20% to savings and debt repayment. It was popularised by US Senator Elizabeth Warren in her book "All Your Worth" and provides an easy starting point for anyone building a budget.
What counts as a “need” vs a “want”?
Needs are expenses you cannot live without and that are required for basic functioning: housing, electricity, water, minimum food, essential transport to work, and minimum debt payments. Wants are things that improve your quality of life but are not strictly necessary: restaurants, streaming services, hobbies, upgraded clothing, and holidays. The line can be blurry — a car might be a need in a rural area but a want in a city with public transport.
What if my needs already exceed 50%?
In high cost-of-living cities, needs often exceed 50%. This is normal. The 50/30/20 rule is a guideline, not a strict law. If your needs are 60%, aim to cut wants to 20% and still protect 20% for savings. The most important number is your savings rate — aim for at least 10-15% minimum regardless of your other splits.
How much should I keep in an emergency fund?
The standard recommendation is 3–6 months of essential expenses. If you are self-employed, have variable income, or have dependants, aim for 6–12 months. Use our Emergency Fund Calculator to find your exact target. Keep emergency funds in a high-yield savings account, not invested in the market.