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There are 3 categories of the 50/20/20 budget. After calculating your after tax income, split your income into three spending categories – 50% for needs, 30% for wants, and 20% for savings and debt repayment.
The 50/30/20 budget rule is perfect for anyone looking to start a budget. And the good news is, you don’t need any budgeting experience to get started. You can set up your 50/30/20 budget in google sheets or excel.
It provides a great combination of flexibility and structure to help you stick with your budget for the long term. It’s also the easiest and most common budgeting method, which is why so many people see success with it.
And remember, when you set up your 3 categories of the 50/30/20 budget rule, give yourself grace, compassion, and have patience.
It’s really common to forget to budget, go over budget, and have setbacks.
It’s normal, so don’t get discouraged.
How the 50/30/20 Budget Rule Can Help You Budget

Starting a budget can feel OVERWHELMING!
I want to save you time researching to find the PERFECT budget template. The 50/30/20 budget rule is the best budget rule for beginners.
There are a few reasons I think the 50/30/20 budget template is great for anyone looking to start a budget:
- 50/30/20 budget has simple rules to follow
- It’s flexible and forgiving
- Organizes your finances in a logical way
- Best for beginner budgeters who just need a simple budget to get started
If you want to do a deep dive into the 50/30/20 budget categories, and how to set one up, I also wrote a longer, more in depth article about how to use the 50/30/20 budget template.
Ready to Set Up the 3 Categories of Your 50/30/20 Budget?
The 50/30/20 budget is a rule to help you set up your budget. I’ve found that budgeting is easier to do when there are rules and guidelines. Otherwise budgeting feels abstract and confusing.
Here’s a quick summary of the rules to set up the 3 categories for your 50/30/20 budget template.
First, break your take home pay down into percentages for your different types of expenses.
- 50% of your income is for NEEDS
- 30% of your income is for WANTS
- 20% of your income is for SAVINGS and DEBT PAYOFF
All of your expenses and savings can be separated into one of those categories.
The next step is to find a simple budget spreadsheet to track all of the expenses in your 50/30/20 budget categories.
If you’re ready to start your budget right now, grab my 50/30/20 budget template for just $5. This cheap budget breaks your spending down into a monthly budget template and annual budget all in one, easy to use spreadsheet.
Your next step is to go read more on the 50/30/20 budget template.
And if you don’t want to deal with the headache and overwhelm of making your own budget spreadsheet from scratch, try my Done for You Budget where I’ll actually make your budget FOR YOU.
You can also read about my other recommendations of more budget rules to help you start your budget.
Our budget and goals changed our lives and it can change yours too.


