50 30 20 Budget Rule For Beginners (Simplified)

50 30 20 Budget Rule is helpful for any beginner who is trying to make their first step in budgeting. But it can create a problem if you don’t know everything about 50 30 20 rule.

What is 50 30 20 budget rule?

50 30 20 Budget rule is a budget-making process that helps to create a healthy budget. In 50 30 20 budget rule one should have to divide your income into 3 parts.

50% of your income will go into needs

30% of your income will go into wants

20% of your income will go into saving and investing

Yes, it is as simple as that. But you should know the importance of 50 30 20 rule which will help you to stay more motivated with your 50 30 20 budgeting journey.

Why 50 30 20 budget rule is important?

  1. 50 30 20 budget rule helps to create stability in your income
  2. You become more aware of 50 30 20 budget rule
  3. More control over your money
  4. You become disciplined with money management

Things to keep in mind about the 50 30 20 Budget rule.

  1. Don’t think that you can live your whole life with the 50 30 20 budget rule (because depending on your income you make your budget).
  2. 50 30 20 budget rule is for beginners

Who cannot apply the 50 30 20 Budget Rule?

If you are very rich and very poor in both cases you can’t use 50 30 20 rule. Because if you are very rich you don’t need 50 30 20 rule. I said you don’t need 50 30 20 budget rule. You need another budget rule that will practically apply to your earnings.

Whereas when you are very poor you don’t need that 50 30 20 rule. Why? Because when you look at 50 30 20 budget rule that 30 says to put money in wants. Tell me one thing when you yourself facing a problem with your needs.

Is it necessary to spend 30% on wants? Don’t you think that it is stupidity?

How to manage monthly expenses?

To manage monthly expenses you need to have a budget. In order to manage your manage monthly expenses the key is to track every single penny which will help you to cut down unwanted expenses.

Work on saving money more money. Listen I know saving money is tough because you have a low-income salary. But you have to do it. Look and review your budget on a daily basis.

How do you calculate 50 30 20 rule with an example?/ How to budget your money with 50 30 20 rule?

Let’s suppose you earn 500$ every month. So according to 50 30 20 budget rule, you will divide your income into 3 parts.

50% of 500$ = 250$ ( This will go under needs )

30% of 500$ = 150$ ( This will go under wants )

20% of 500$ = 100$ ( This will go under-saving and investing )

Like this, you can calculate and make your budget with 50 30 20 rule.

How much of my salary should I save?

There is no hard and fast rule about how much money one should save. But if you ask me I will suggest 10% of my income at least to save. It is compulsory to save. This is what the Richest Man in Babylon book says to save at least 10% of your income in order to live your life happily and peacefully.

Should I make my own budget rule?

Yes, you can but the condition is you should have very good knowledge about personal finance or you can ask a financial advisor to make a budget for you.


Don’t look at 50 30 20 budget rule as a strict budget if you have a high package or a very low package. You can customize it according to your income. One should always review and change the budget from time to time.


Does 50 30 20 rule apply to every budget?

No never ever… you can’t do this. Tell me someone who earns million dollars every month or very very low income. In both cases, it’s not practical to follow 50 30 20 budget rule.

What is the easiest budget method?

50 30 20 budget rule is the easiest budget method for any newbies.

Which budget rule is best?

The budget rule which suits you the best is the best. Simple. Make your own budget rule if you have a little bit of knowledge for more accurate results.

Read more:

  1. How to become a millionaire
  2. 10 reasons for leaving a job

You are always welcome to my blog regarding personal finance growth. One Step Towards Financial Freedom.

Thank you for reading. I hope your financial journey goes smoothly.

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