Necessities (50%)
Wants (30%)
Savings (20%)
Calculate your after-tax income. The 50/30/20 rule is a popular budgeting method that splits your monthly income among three main categories. The 50/30/20 budget dedicates 50% of your income to needs, 30% to wants, and 20% to savings. The 50/30/20 rule is a budgeting plan designed to help you manage your finances. This method is also called “the balanced money formula,” as it can help you strike a healthy balance between saving and spending.