Budgeting

50/30/20 rule

The 50/30/20 rule splits monthly take-home income into 50% for needs, 30% for wants, and 20% for savings and debt repayment.

It's a high-level starting framework, not a rigid rule: in cities with expensive housing, a 60/20/20 split keeps the essential savings block intact and is more sustainable.

Put it into practice

Related terms

Budget — A budget is the advance allocation of your income to spending and saving categories, with later tracking of the differences.
Emergency fund — An emergency fund is a liquid cushion equal to three to six months of fixed expenses, set aside exclusively for unexpected events.
Savings rate — Savings rate is the percentage of your take-home income that you don't spend and instead put toward saving, investing or paying down debt.

Bring it to your own numbers

netclariq applies these concepts to your real accounts, debts and investments, with simplified double-entry bookkeeping and without asking for your bank credentials.

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Educational content. netclariq does not provide financial, investment, tax or legal advice.