Definition
50/30/20 rule
The 50/30/20 rule splits take-home pay into three shares: 50% for needs, 30% for wants and 20% for savings and extra debt payments.
It is a starting structure rather than a strict rule. Its value is that it forces a decision about the third share, which is the one most budgets never make.
Tools that use this term
Budget Calculator
Split your take-home pay into needs, wants and savings with the 50/30/20 guideline.
Emergency Fund Calculator
How many months of expenses your emergency fund covers, and what to target next.
Savings Goal Calculator
How many months it takes to reach a savings target, with monthly deposits and interest.