The 50/30/20 Rule: Budgeting Like a Pro While Saving for Splurges

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Hey Bestie,

Let’s talk money—but not in a boring way, okay? You know I’m all about finding balance: living your best life while still being responsible with your coins. That’s where the 50/30/20 rule comes in. It’s a super simple budgeting method that helps you cover your needs, enjoy your wants, and stack those savings like a pro. Let’s break it down together.

What Is the 50/30/20 Rule?

The 50/30/20 rule is all about dividing your after-tax income into three categories:

• 50% for needs: Think rent, groceries, insurance, and bills. These are your essentials.

• 30% for wants: This is your guilt-free fun money! Dining out, Netflix, that cute bag you’ve been eyeing—it all goes here.

• 20% for savings and debt repayment: This is where you’re building wealth. Save for big goals, invest, or pay off that credit card.

It’s simple, effective, and perfect if you’re looking for structure without feeling too restricted.

Step 1: Know Your Numbers

Let’s start with the basics. Take a look at your after-tax income. If you’re not sure how much you’re bringing in, grab your pay stubs or check your bank account. Once you know your monthly income, multiply it by 0.50, 0.30, and 0.20 to figure out how much goes into each category.

And listen, if math isn’t your thing, I’ve got you covered. Download my digital budget spreadsheet here and let it do the calculations for you. Seriously, it’s a game changer.

Step 2: Adjust to Fit Your Lifestyle

Not all budgets are one-size-fits-all. If your rent is a little high, you might need to borrow from your "wants" category to make it work. That’s okay! The goal is to stay close to the 50/30/20 structure while customizing it to fit your life.

Step 3: Automate Your Savings

Set it and forget it. Automate your savings so the money goes straight into a savings or investment account before you can even touch it. This makes it so much easier to stick to your goals.

Step 4: Splurge Without Guilt

The beauty of the 50/30/20 rule is that it gives you permission to enjoy your money. When you know your bills are covered and your savings are growing, you can treat yourself without any of that "Should I really buy this?" guilt.

Ready to Budget Like a Pro?

Budgeting doesn’t have to feel like punishment. With the 50/30/20 rule, you can take control of your finances and still have room for the things that bring you joy.

If you’re ready to get started, download my budgeting spreadsheet here. It’ll make tracking your 50/30/20 budget easy and stress-free. And don’t forget to save this post on Pinterest for later so you can revisit these tips anytime you need a refresher.

You’ve got this, bestie. Let’s get that budget working for you!

XO,
Budget To Luxury