The 50/30/20 Method
When using this 50/30/20 budgeting system, every dollar of your after-tax income is allocated to a specific purpose. To start, allocate 50% of your budget to necessities
such as housing, insurance, and transportation. From there, 30% of your income goes toward wants
. This would be eating out, shopping, traveling, and more. Finally, 20% of your income goes toward savings and/or debt
. This rule is intended to help individuals manage their income, with a primary goal of consistently being able to pay your bills while adding to savings or paying down debt.
We've made the math easy with this handy calculator!