Mastering Your Money: The Chic Guide to the 50/30/20 Budget Method

What is the 50/30/20 Budget?

The 50/30/20 rule is a simple, effective way to manage your money by dividing it into three categories: needs, wants, and savings/debt. It’s perfect for the modern woman who wants to stay financially savvy while enjoying life!

 

Step 1 – Calculate Your Income

Before you can start, you need to know exactly how much you are working with. Grab your last few pay stubs or calculate your monthly income if you are self-employed. Don’t forget to include any side hustle income (because #bossbabe, right?).
 

Step 2 – Break Down Your Needs (50%)

Your needs should make up 50% of your monthly budget. This includes essentials like housing, utilities, groceries, transportation, and insurance. Think of this category as everything you need to live your fabulous, everyday life

 

 

Example:

For example, if you earn $4,000 a month, 50% of that is $2,000. That’s what you should aim to spend on your essential living expenses.

 

Step 3 – Allocate Your Wants (30%)

This is where your self-care, Starbucks, and fine dining come in! The 30% for wants is all about enjoying life—think brunch with your besties, spa day or massage, or that new Louis Vuitton bag you’ve had your eyes on all month. Just make sure you are mindful of how much you are spending.

Step 4 – Focus on Savings & Debt (20%)

The final 20% goes towards savings and paying off debt. This is where you will really transform yourself from basic to being THAT girl! You cannot be a baddie, and your bank account is giving broke-y. Here is where you will build a string foundation for your future, whether it’s paying down your credit cards or building your emergency fund.

 

 Example:

 If you’re making $4,000 a month, aim to put $800 towards savings and paying off debt. Whether you’re saving for a dream vacation or paying down your student loans, this category is key to your financial freedom.

 

 

 

 

Customizing the 50/30/20 Rule for You

Everyone’s financial situation is different, so don’t be afraid to tweak the 50/30/20 rule to fit your life. You’re super focused on paying down your debt and want to do 40/20/40 instead— go for it, babes! The most important this is staying intentional with your spending.

 

 

 

 

Budgeting doesn’t have to feel boring or like a chore. With the 50/30/20 rule, you can keep your financial life simple and chic—balanced and on track! You want to know the best part? You will still have room to enjoy the things you love while working towards your goals. Want to try out the 50/30/20 Budget Method for yourself? Download my FREE 50/30/20 budgeting template below!