BudgetsMonthly
50/30/20 budget
A budget sheet for the 50/30/20 rule of thumb. Categories fall into three labeled sections, needs at about 50 percent of take-home pay, wants at about 30 percent and savings and extra debt payments at about 20 percent, and a small box lines up your take-home pay against each share.
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On this page
What prints
The page is titled 50/30/20 Budget and has month and year lines. An income table (Income, Budget, Actual) lists Paycheck 1, Paycheck 2 and Other income. Next to it is a four-line box labeled Take-home pay, 50% for needs, 30% for wants and 20% for savings. The sheet does not compute those shares; you do the multiplying and write the results in.
Below is one table with the columns Category, Budget, Actual and Difference, split into three bands:
- Needs: about 50% of take-home pay. Rent or mortgage, Utilities, Groceries, Insurance, Transportation, Minimum debt payments, Childcare and a blank line.
- Wants: about 30%. Eating out, Entertainment, Shopping, Subscriptions, Travel and two blank lines.
- Savings and extra debt payments: about 20%. Emergency fund, Retirement, Extra debt payments, Other goals and a blank.
The settings
- Heading. Add your own title or keep the default.
- Notes box. Show or hide the ruled box at the bottom.
Sorting needs from wants
The hard part of this rule is deciding which bucket a bill belongs in. Needs are costs you must cover to keep working and housed: shelter, basic food, insurance, transport to work, and the minimum payment on every debt. Wants are everything you could pause without serious harm. A phone is a need, while the premium plan is partly a want.
Treat 50/30/20 as a starting point. In an expensive city, needs may take 60 percent, and that is fine if you trim wants to match. Many people also find the debt line goes in the savings band once it is beyond the minimum, which is how this sheet is arranged.
Worked example: $3,000 take-home pay
Targets: 50% of 3,000 = $1,500 for needs; 30% = $900 for wants; 20% = $600 for savings and extra debt.
Casey's needs: rent 900 + utilities 170 + groceries 250 + insurance 100 = $1,420. That is 1,500 − 1,420 = $80 under the target. Wants are planned at the full $900.
Casey sends the unused $80 to the savings band, so savings and extra debt come to 600 + 80 = $680. Check the whole month: 1,420 + 900 + 680 = $3,000. Every dollar has a place.
Reviewing at month end
When the month closes, add up each band's Actual column and compare it with the target shares you wrote in the box. If needs keep landing above half, look at the biggest line first. Housing usually is. Moving a few percent from wants to cover it is easier than asking a single bill to shrink. Write what you decide in the notes box so next month's sheet starts from a plan, not a guess.
A reminder
The percentages are a popular rule of thumb and not a rule that suits every household or a recommendation for yours. Adjust the shares until the plan fits your real bills.