When first creating a budget, it can be hard to know how to divide your money–what should be given priority.
One easy way to figure that out is to use the 50/30/20 budget rule, and we designed a printable for the 50 30 20 budget to help you get started.
What is the 50/30/20 Budget Rule?
Before we dive into the printable, let’s briefly talk about the 50-30-20 budgeting method that it is used for.
The 50/30/20 budget method is a simple way to divide up your income into three distinct categories.
This will help make your budget creation easier since there aren’t so many categories to worry about and keep track of.
If you want to use this method, here is the break down of this budget rule.
50% of your income should go towards your “Needs”.
These would include things like mortgage, utilities, groceries and all other mandatory-must-have-it-to-survive expenses.
30% of your income is dedicated to your “Wants”.
Your wants would include expenses like entertainment, travel, subscription services, personal spending money and the like.
It is important, when using this budget method, to really take a hard look at your needs versus wants. Doing so can really help you be successful using this budget.
Finally, 20% of your income should go towards savings and debt.
You could put money towards particular savings goals or sinking funds, retirement, investments or any other financial goal.
If you are trying to become debt free, you can also use this money to make extra debt payments.
50 30 20 Budget Template PDF
We designed a printable worksheet that is fun and easy to use, to help you create a 50-30-20 budget for yourself.
The template walks you through creating a budget using the 50-30-20 budget rule so that you can start making a plan for your money.
Using it is pretty straightforward.
In the Income section, write in where your money is coming from, how much you will be getting, and the total income from all sources/jobs.
Second, move onto the needs section.
Calculate what 50% of your income is. Enter this amount on the line.
Then fill in your expenses and the amounts for each in the table. Add them up at the bottom.
Next, fill in the Wants section.
Calculate how much will go to wants (30% of income), and write in what wants you pay for each month.
Finally fill in the Savings/Debt section, as you did the previous two sections.
Along the way you will calculate if there is any money “leftover” in each section.
If so, you can use that money to save more, payoff debt, cover other needed expenses or do something fun with it.
Also included is a section to write your money goals for the month, to help you stay focused with your budget and dreams.
We love this printable and how easy it is to use for your budgeting plans.
It will really help you get started with a budget and deciding where your money should go.
50/30/20 Budget Example
To see how this budget method works out in a real life setting, check out this budget example.
This budget was created using the 50/30/20 budget worksheet, which we talked about above.
In this example, the person has a monthly income of $4000.
This means that they would have $2000 allocated for their “Needs”. All of the expenses listed in the “Needs” section should be covered by this amount. As shown here.
The next section is “Wants”. This person will have $1200 to pay for the budget items listed under “Wants”.
You will notice that this person’s budget example is more frugal than some others.
By limiting the “wants” section of the budget, they are able to have some money designated for “wants” left over, and can use it elsewhere.
The last section is “Savings/Debt”. In this example, the person can set aside $800 per month for their savings goals.
This person used some of the leftover from wants and is able to save more and put money towards debt.
BUT they still have more money left over. So they need to decide if it should go towards more savings, more debt or some other finance goal.
If 50% of your income doesn’t cover your “Needs”, or basic living expenses, you may need to adjust these percentages.
There may be less money for the “Wants” or “Savings/Debt” Sections of this budget to make sure that your needs are paid for.
Time to use the 50/30/20 Budget Worksheet
Now that you know how to create a budget using the 50/30/20 method, and have seen how to use the printable worksheet, it is your turn!
Get yourself a copy of the printable 50/30/20 Budget Worksheet and spend the time to make a feasible budget for yourself.
It is never too late to start a budget, to start taking control of your finances and reaching your money goals.
We all start at the beginning. You got this!
Let me know if you have any questions!
FAQ about the 50 30 20 budget rule
Does 50 30 20 come before taxes?
No. When budgeting your money, you need to budget the income that actually arrives in your bank account.
You can’t spend money that you never actually receive.
Use the 50/30/20 budget method for your income, after taxes and deductions
Does 50/30/20 include Retirement?
Yes, it can. In the 20% portion of your budget, you decide what you will save towards.
Putting part of the money away for Retirement is an excellent idea.
Is the 50/30/20 budget done weekly or monthly?
You can really use this method whatever way works best for you.
If you get paid once a month, then that is easy to answer–budget your money monthly.
If you are paid weekly, bi-weekly or some other time schedule, then you can decide.
You can budget each paycheck using this method, and just know that each paycheck will provide a portion of the expenses.
So, for instance, if you are paid twice a month, each paycheck would cover roughly half of any given expenses in your budget.
Is the 50/30/20 budget realistic?
I get it. Money is tight right now. Inflation is eating the money in our checking accounts faster than we can replace it.
The 50/30/20 budget is a simple way to break up your paycheck, but if more than 50% of your income is needed cover your basic needs, you may need to adjust the percentages.
It is a good way to start budgeting, but may not be the best right now or in the long term for you. Only you can really decide that.
You might try the 80/20 budget, the 70/20/10 budget or check out our other budgeting worksheets for ideas.