50/30/20 Budget

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Here is a list of our partners. 50/30/20 Budget Enter your monthly income after taxes into this free budget calculator to create a budget that accounts for your needs, wants and savings goals. Written by Amanda Barroso Amanda Barroso Lead Writer & Content Strategist 4 years of experience Expertise Budgeting and saving Credit building Credit Scoring Amanda Barroso, Ph.D., is a writer and content strategist helping consumers navigate budgeting, credit building and credit scoring. Before joining NerdWallet, Amanda wrote about demographic trends at the Pew Research Center and earned a Ph.D. from The Ohio State University. Her work has been featured by the Associated Press, Washington Post and Yahoo Finance. Published in Co-written by Elizabeth Ayoola Elizabeth Ayoola Writer 8 years of experience Expertise Retirement credit wellness Elizabeth Ayoola is a Lead Multimedia Producer and Co-Host of the "Smart Money" podcast. Before delving into the podcast world, Elizabeth acquired over ten years of experience as a writer, and seven were spent covering personal finance topics. Her journey to finance writing started with a goal to learn as much as she could about how to attain financial freedom and share information with others about how to do it, too. This led her to Debt.com, where she covered topics relating to mortgages, debt and credit. Her articles have appeared on platforms like Washington Post, The Associated Press, The Washington Post, Yahoo, Essence, The Knot, PopSugar and Parents.com. Elizabeth has also done extensive spokesperson work and appeared on multiple renowned national networks like Good Morning America, ABC, NBC, and Fox to discuss money. Published in Edited by Laura McMullen Laura McMullen Editor & Content Strategist 10 years of experience Expertise Personal finance financial news student loans Laura McMullen assigns and edits content related to personal loans and student loans. She previously edited money news content. Before then, Laura was a senior writer at NerdWallet and covered saving, making and budgeting money; she also contributed to the "Millennial Money" column for The Associated Press. Before joining NerdWallet in 2015, Laura worked for U.S. News & World Report, where she wrote and edited content related to careers, wellness and education and also contributed to the company's rankings projects. Before working at U.S. News & World Report, Laura interned at Vice Media and studied journalism, history and Arabic at Ohio University. Laura lives in Washington, D.C. Published in other Fact Checked How is this page expert verified? NerdWallet's content is fact-checked for accuracy, timeliness and relevance. It undergoes a thorough review process involving writers and editors to ensure the information is as clear and complete as possible. More on our editorial rigor SOME CARD INFO MAY BE OUTDATED This page includes information about these cards, currently unavailable on NerdWallet. The information has been collected by NerdWallet and has not been provided or reviewed by the card issuer. What is the 50/30/20 rule? The 50/30/20 rule is a simple way to plan your budget. It suggests using 50% of your take-home pay for needs, 30% for wants, and 20% for savings and paying off debt.Typical needs include housing, transportation, insurance, childcare, utilities and groceries. Everyone’s “wants” are different, but dining out, concerts, streaming services and kids’ sports and activities likely fall into this category. The savings and debt paydown category includes retirement savings in a 401(k) or similar account, 529 educational savings and investments alongside credit card, student loan and other debt payments. Think of this budget as a helpful guide, not something you have to follow perfectly. It can help you cover the basics, enjoy some fun spending, and still put money aside for saving and future goals. Here’s how each category works and what might fit into each one: The percentages in the 50/30/20 budget can be changed to fit your financial needs at a given moment. If saving or paying down debt is a priority, for example, it’s OK to shrink your wants bucket and increase the savings and debt bucket. Next steps checklist Now that you know how much of your income to put toward necessities, wants and savings and debt repayment, it’s time to stack that up against your actual spending. ✅ Step 1: Look at your last one to three months of spending Pull out your bank and credit card statements and add up your spending. Total up your needs, wants and savings/debt repayment numbers. How do they compare with the 50/30/20 categories? For example, do your "wants" exceed 30%? If so, highlight a few expenses you want to adjust first. Dining out, food delivery and subscriptions are good places to start. Finding ways to save on groceries by swapping for store brands or shopping at discount grocers like Aldi or Grocery Outlet could also offer valuable savings in the 50% "needs" category. ✅ Step 2: Make one small change this week It’s time to take action. Pause or cancel that subscription you’re not using. Make a grocery list and stick to it. Move $25 into your savings account. Focusing on one quick win can build momentum, especially as you start to see savings stack up. ✅ Step 3: Automate as much as you can Setting up automatic payments for credit cards, debt and savings and investments can takes some of the stress out of money management. Automating payments adds consistency to your money routine and can help you stay on track. Choose realistic amounts for savings. Set aside a specific amount for your emergency fund. Consider how much you want to save for other things, such as vacations, holiday gifts and other big purchases. Then evaluate how much you can put toward other goals like a wedding, home or car purchase. If you have debt, schedule automatic payments above the minimums, if possible, to chip away at your debt.Alternative budgeting methods While the 50/30/20 method can be a good place to start, it might not always fit your needs or circumstances. Here are some alternatives: If you live in a high cost of living area, or have high childcare costs, the 60/30/10 budget might work better during this season of life. If you want to curb impulse purchases and feel more emotionally connected to your money, the envelope system might be a good way to start. Zero-based budgeting is another method, geared toward people who want to assign a “job” to every dollar they have coming in until they have zero dollars left at the end of the month. If your goal is to prioritize savings, reverse budgeting might be for you. In this method, you put money toward savings and retirement first, before paying fixed and variable expenses like rent and groceries. This method requires careful planning, so you don’t overdraft or come up short for your other bills. » Read more about how to choose the right budgeting system Dive deeper with your monthly budgetFor more budgeting advice, including how to prioritize your savings and debt repayment, review our tips for how to budget. Not sure how to start budgeting? A pen and paper is a free and low stakes way to list your expenses. If you want something more automated, download a budget app. Meet MoneyNerd, your weekly news decoderSo much news. So little time. NerdWallet's new weekly newsletter makes sense of the headlines that affect your wallet. SUBSCRIBE FOR FREE Explore more onThe Financial Glow UpMoney News You Can UseMoney ManagementMaking MoneyPaying Your BillsPersonal Finance Back to top Related articles Free Budget Template: A Simple Tool to Help You Track Your Money 2 By Lauren Schwahn, Amanda Barroso 50/30/20 Budget Calculator 2 By Amanda Barroso, Elizabeth Ayoola The Best Budget Apps for 2026 3 By Amanda Barroso, Lisa Mulka, Laura McMullen How to Choose the Right Budget System: 4 Methods to Consider By Lauren Schwahn Zero-Based Budgeting: What It Is And How It Works 2 By Lauren Schwahn, Elizabeth Ayoola Is the 60/30/10 Budget Right for You? 2 By Tiffany Curtis, Amanda Barroso What Is Cash Stuffing? How to Use the Envelope Budget System 2 By Lauren Schwahn, Elizabeth Ayoola Pay Yourself First: Reverse Budgeting Explained 2 By Lauren Schwahn, Amanda Barroso