Budgeting isn’t easy. Not only do you have to plan out what you are going to spend but then you have to track that spending to make sure you do what you say you were going to do.
Because budgeting makes me feel like
its so important to make sure its as easy as possible.
There are all different types of budgets out there but the 50 30 20 budget is one of the more straightforward ones.
In this post we learn more about this budget, what it actually entails and I even provide a 50 30 20 budget calculator for free.
What does 50/30/20 budget mean?
This specific type of budget is fairly straightforward to understand. There are three groupings of expenses and an allocation of your budget assigned to each. Here are the groupings as well as some example expenses that fall into each category
- 50% = Needs & necessities
- rent/mortgage, gas, groceries, medical expenses, household expenses
- 30% = wants
- Eating out, entertainment, shopping, travelling
- 20% = savings & investing
- retirement, taxable savings
While this certainly doesn’t list every possible expense it should allow you to group your own expenses. Here is another great resource to learn about the 50/30/20 budget.
Important Things to keep in mind
Make your own determinations on what falls in the 50 group and 30 group. Your system is going to look a lot different than someone else’s and that’s ok. The important thing is to make it your own.
You won’t actually hit exactly 50, 30, and 20 ever month. Again, that’s ok. Those numbers are guidelines. There is one rule though:
Never sacrifice your 20%.
The day you take that number below 20% its going to get easier every time. It’s vital to save that 20% of your income. It will just take a single time of saving 19% for you to realize that this number if flexible as well. Don’t make that mistake.
It may not be possible to save 20% right now. Don’t forget, this is YOUR plan. The goal is to get to 20% someday. Put together a plan that will get you there.
50 30 20 budget calculator
I’ve put together a calculator that will help you with the 50 30 20 budget. Click here to get access!
Good luck as you dive into this 50 30 20 budget calculator!