If you’re looking around every month wondering where on earth all your money has gone to, the 50/30/20 rule is going to change your life.

Here’s the deal:

You need a budget regardless of how ‘much’ or how ‘little’ money you make.


Without a budget, you are highly unlikely to be able to afford your lifestyle, pay down debt, or save money.

It’s cool, though:

Creating a budget for your money is hella easy – especially the 50/30/20 budgeting method.


Let’s get started!

What is the 50/30/20 Budget Rule?

The 50/30/20 budget rule is super simple.

You’ll take your income and spend 50% on needs, 30% on wants, and 20% on savings.

By the end of this post, I’ll cover everything you need to know to set up a 50/30/20 budget so you can explode your wealth.

Here’s a quick overview of what we’ll be covering:

  • 1. Determine Your Why Factor
  • 2. Collect Your Financial Information
  • 3. Calculate Your Income & Expenses
  • 4. Cut Costs
  • 5. How To Set Up A 50/30/20 Budget
  • 6. Tracking Your Budget

I’ve also created a downloadable checklist and monthly budgeting template for you.  Simply sign up below to download it! 😊

Who Is a 50/30/20 budget good for?

I’m gonna be honest:

A 50/30/20 budget is not for everybody.  In fact, I’d go as far as to say that this budget is not for most people.

Why’s that?

Well, as I mentioned, with a 50/30/20 budget, you will be spending 50% of your income on needs, 30% on wants, and 20% of your budget on savings.

I mean, the first time I heard about the 50/30/20 budget rule, I thought “Wouldn’t that be nice!”

My point is:

A 50/30/20 budget is really restrictive and doesn’t work well for people who have a tight income to expense ratio.

However, a 50/30/20 budget IS a good choice for you if you have a lot of freedom with you income and want to buckle down on how you spend it.

If a 50/30/20 budget doesn’t sound like a good fit for you, check out this post where we round-up the 5 best budgeting methods to find a match for your lifestyle.

If this is the budget for you, let’s keep going:

1. Determine your why

Ok so, we’ve already established this:

Every single person needs a budget if they want to be financially successful.

But why.

This answer will be different for everybody.   You can determine your why factor by asking yourself what budgeting will help you achieve in your life.

For example:

You might want to start budgeting to stop living paycheck to paycheck, to free up money to pay off debt, or to save more money.

Knowing your why is essential because it creates meaning for your purpose.  Without it, you’d have no motivation to continue budgeting.

Because let’s be honest:

If you do not have a plan for your money, how are you going to afford your dream life?

2. collect your financial information

The best part about this step is that it’s super simple and shouldn’t take you much time.

You’re simply going to gather up your financial records, such as:

  • • a months worth of pay stubs from all sources of income
  • • a list of the bills you pay and for how much
  • • a months worth of receipts for variable spending on such things as groceries, transportation, household items, take-out, etc.
  • • bank account information

Once you have those things we can dive into the budget!

3. Calculate your income and expenses

The start of every budget begins with calculating your income and expenses.

This is a crucial step to creating a budget that works because if you’ve never budgeted before, you probably don’t actually know how much money you make or spend each month.

Therefore, you’re it’s probably highly likely that you’re spending more than you can afford.  Or at the very least you’re not spending your money in the smartest way.

So, to figure out how much money you’re working with for your budget, let’s calculate your total monthly income.

Your Income:

Using the financial information you gathered during step two, calculate your total monthly income (after taxes) from all sources.

Monthly Income Template From The Budget Boss Binder™

For the purposes of this post, let’s pretend your total monthly income is $5,000.

Your Expenses:

Next, you’ll want to calculate your total monthly expenses.

Following the 50/30/20 budget rule, break your expenses down into two categories:

  • 1. Needs (Rent/Mortgage, Utilities, Groceries, Insurance, etc.)
  • 2. Wants (Personal Spending, Dining, Shopping, etc.)
Monthly Expenses Template From The Budget Boss Binder™
If you aren’t sure what your monthly expenses are, begin tracking your spending in a budget binder to calculate an average at the end of the month.

For the purposes of this post, let’s pretend our needs total $2,500 and our wants total $1,500.


Financial Evaluation:

Now that you have you total monthly income and total monthly expenses calculated, you can do some simple math to see if you’re living within or beyond your means.

Simply take your total monthly expenses and subtract that number from your total monthly income.

For example:

$5,000 (total income) – $4,000 (total expenses) = $1,000

Financial Evaluation Template From The Budget Boss Binder™


If the number is a positive number, you’re in the green.

You should be able to afford your lifestyle with ease each month.  If you’re scratching your head right now wondering where all your extra cash has been going, then starting a budget is the best thing you can do for your finances.

If the number you calculated is a negative number, you’re in the red.

You cannot afford your current lifestyle and are spending more money than you earn.  Decreasing your expenses will be key to starting a successful budget.

But wait:

Everybody can benefit from decreasing their expenses, so don’t skip the next step even if you’re in the green!

4. Decrease your expenses


I know what folks in the green are wondering, “why should I decrease my expenses if I’m making more than I’m spending?”

Well, more money in your pocket is always, unanimously a good idea, right?

Decreasing your expenses will make sure that you’re not wasting money on stupid stuff and will free up money for the good stuff.  The important stuff. (Like vacations, duh!)
To decrease your expenses, follow these 3 steps:
  • 1.  Take out your list of expenses and mark each one with a star that you think you could eliminate or decrease.
  • For instance, could you find a company that offers internet at a lower cost?  Are you overpaying for car insurance?  Maybe you could refinance your mortgage or student loans for lower interest rates. Could you carpool and decrease your transportation costs?  Are you spending waaayy too much money on coffee at Starbucks each month?
  • You get the point!  Do the research and you’ll be ah-freaking-mazed at how much money you could be saving.
  • 2.  Sign Up For Truebill
  • When you sign up for Truebill, they’ll securely connect to your bank account(s) to analyze your spending, subscriptions, and recurring bill pay.  Then, Truebill will work its magic by helping you cancel unused subscriptions, negotiate lower bill prices, and improve your credit score.  In the last five years alone, Truebill has helped its users save over ONE HUNDRED MILLION DOLLARS!
  • You can sign up for Truebill here and be saving money in minutes!
  • 3.  Pay Off Your Debt
  • Credit card debt, car loans, and student loans will suck you dry every month if you don’t work hard now to pay off what you owe.  My two best recommendations for paying off debt quickly are to consolidate your debt into a low-interest personal loan or use the debt snowball method to pay off your debt.
  • Doing this will save you hundreds – if not thousands – of dollars over the course of your life.
Now, I’m gonna be real:
If you only do one thing after reading this post, let it be to decrease your expenses.
It is by far the simplest thing you can do to free up extra money in your life.

5. set up your 50/30/20 budget

You made it! We’re finally ready to budget!

Follow these steps to set up your 50/30/20 budget:

  • 1.  Multiply your total monthly income by 0.5.  This is how much money you should be spending on your needs.
  • If you’re spending more than 50% of your income on needs, go back to decreasing your expenses.  If you cannot decrease your expenses any further, a different budgeting method is probably best for you. Check out our other budget recommendations here!
  • 2.  Multiply your total monthly income by 0.3.  This is how much money you can spend on your wants.
  • 3.  Multiply your total monthly income by 0.2.  This is how much money you have to put towards debt repayment and/or savings and investing.
  • 4. Open a bank account for your wants, needs, and savings.  Then have your direct deposit put 50% into your wants account, 30% into your needs account, and 20% into your savings account each pay cycle.

As you can see, the 50/30/20 budget rule is great for becoming more intentional with how you spend your money.

Again, though:

If your percentages aren’t evening out correctly, try decreasing your expenses, making more money, or trying a different budgeting method.

6. tracking your budget

Here’s the deal:

Most people forget the most important part of budgeting and then wonder why their budget failed a month after implementing it.

Tracking your budget is the most important part of budgeting.  If you have a budget, then you need to track it.

Because let’s be real:

If you do not track your budget, you cannot make sure that you are sticking to your budget.  And if you aren’t making sure that you’re sticking to your budget, your budget will fail.

Budget Boss Binder™ Tracking Templates


Let’s look as a real-life example:

You’ve just created a 50/30/20 budget for your money and therefore should have enough money in your needs account for all of your monthly bills.

BUT, you forgot that this month your car insurance premium needs to be renewed and you’ll owe $100 more than usual.

Then, since you haven’t been tracking your budget, you do not realize this and your bank account is over-drafted.

Ugh!  Not good!

And, here’s the kicker:

If you were tracking your budget, you would have caught this budgeting error in advance, transferred $100 from savings into your fixed expenses account to cover the difference and never overdrafted your account.

So, you might be wondering:  How do you track your budget?!

We developed the Budget Boss Binder™  to track any and all budgets, debt repayment, savings goals, bill payments, and more.

The Budget Boss Binder™ is a printable and digital budgeting planner designed to help you stick to your budget, pay off debt, save money, and create an abundant life.  The templates included are un-dated so you only have to purchase once to use this them forever.

Because you’re a valued reader of Who Says What, we’re offering our best selling Budget Boss Binder™ to you for 50% off when you click the button below!

Skip to the end? READ ME!!

Ok, so I know this was a loonngg post.  So I get it if you skipped to the end.

I’m gonna be honest with you though:

You cannot set up a successful budget by skimming this post.  There’s just too many little details that you’d miss.

But, I will throw you a bone:

When you sign up for our free mini Budget Boss™ eCourse, you’ll receive a paced version of this post over the course of 5 days.  You’ll also unlock access to our free resource library which contains the 50/30/20 budgeting method checklist and template!

I will walk you through each step with mini homework assignments so that setting up a budget isn’t so overwhelming.

Simply use the form below to register for your free Budget Boss™ eCourse today!

Creating a budget was the best thing that ever happened to my finances.

It helped me to stop living paycheck to paycheck, pay off thousands of dollars in debt, and explode my savings account.

I want these same things to be true for you, so: 


Gather your financial information, implement your 50/30/20 budget, and track your budget for success!