50/30/20 Rule
A simple budget guideline: 50% needs, 30% wants, 20% savings and debt repayment.
The 50/30/20 rule is a beginner-friendly budgeting framework that splits after-tax income into 50% for needs, 30% for wants and 20% for saving and extra debt payments. FIRE-focused savers often push the savings portion well above 20%.
Examples
- On $5,000 take-home pay, that's $2,500 needs, $1,500 wants and $1,000 saved.