Ready to turn budgeting theory into money-management practice? Let’s get cracking on creating your own 50/30/20 budget!
Here’s a blank 50/30/20 budget spreadsheet template that makes it easy by doing the math so you don’t have to.
Your download will be an Excel file—you can also upload it to your Google Drive and convert it to a Google sheet if you prefer!
Read on for tips and examples to help you make it your own.
50/30/20 budgeting in a nutshell
With this budgeting approach, you divide your monthly income among three broad categories: essentials, fun, and debt/savings. It’s simple: 50% of your take-home pay is for essentials (“needs”), 30% is for things you’d really like to have but could live without (“wants”), and 20% is for saving up + paying down debt.
Get a deeper dive with this guide on how to create a 50/30/20 budget.
5 steps to making a 50/30/20 budget
- List your income: Enter your total monthly take-home pay (after taxes and deductions, including money for taxes you need to set aside if you’re self-employed).
- List and sort expenses: List your monthly needs, wants, debt payments (tip: put minimum required debt payments in “needs”), and savings goals—one item per line. For each line, enter the amount you’ll spend each month for that line item.
- 50/30/20 check: Total the amounts for needs, wants, and debt + savings. Check to see how close you are to the 50/30/20 split, and make any adjustments needed to get in the ballpark (the percentages don’t have to be exact).
- Income - expenses + adjustments: Now subtract your expenses from your income. If you’ve got money to spare, decide how you’d like to spend it—you could bump up your savings or debt payments, or give yourself a little more room for “wants.” If you’ve come up negative, this blog post includes some ideas for trimming expenses.
- Take it on the road! Make sure you check in regularly to see how your budget is working in real life, and expect to adjust as you learn.
50/30/20 budget examples You’re starting with a 50/30/20 budget spreadsheet template, but you’ll want to make adjustments to fit your unique circumstances. To help you see how this kind of budget might work in different situations, check out these “based on a true story” budgets of some fictional people and their financial lives.
Example #1: Meet Tay
Tay is an artist and works as a grocery store produce manager in a medium-sized city. They live with two roommates right now, and they’re saving for a downpayment on a house. Their car is having transmission trouble and they want to buy a better car soon—without touching the three-month emergency fund they spent several years squirreling away. They also have some medical costs that aren’t covered by insurance.
Here’s a brief overview of how they make a 50/30/20 budget, with a few examples of the specific line items they include.
Monthly income = $2630
- Salary of $2430 after deductions
- Income from Etsy shop, about $200 per month (minus what they’ve set aside for taxes)
Total monthly expenses = $2605
Needs = $1300 total
- Rent: $400
- Car insurance: $100 (bi-annual divided by six to get a monthly amount)
- Physical therapy: $100
- Art supplies: $40
Wants = $525
- Takeout: $100
- Streaming services: $30
- Charitable donations: $50
- Friday happy hours: $85
Savings + debt = $780
- House down payment: $300
- New-car fund: $280
- Emergency fund: $35
Tay makes a line item for each of their needs, wants, and savings + debt items. (Notice that Tay lists art supplies as a “need”—because for them, making and selling their art is a must-have.) When they check their percentages to see how close they are to 50/30/20, they see that their “savings + debt” category came out higher than their “wants” category; they decide to keep it that way, since they’d rather replace their car sooner than spend money on going out. Next, they make sure their income is enough to cover their expenses, and they put a weekly “budget date” on their calendar to check their progress.
Example #2: Meet Tanisha
Tanisha is a lawyer in a mid-size city. She lives with her five year old son, Amin, and her mother, Shirley. Her husband died last year, and her mother moved in to help her care for Amin. Her husband’s medical expenses wiped out her savings and put her in debt, and now she has only one income. She’s focused on slowly rebuilding her emergency fund, staying current with her bills, and saving for Amin’s college fund. Here’s a snapshot of how she uses the 50/30/20 rule.
Monthly income = $4400
- Salary of $4400 after deductions
Total monthly expenses = $4350
Needs = $2650
- Mortgage payment: $1500
- Groceries: $700
- Utilities: $150
- Transit pass: $28
Wants = $800
- Respite childcare: $400
- Pizza every Friday: $100
- Professional clothing subscription service: $50
- Yoga classes: $50
Savings and debt = $900
- Emergency fund: $300
- College fund: $200
- Extra payments on credit cards: $200
After she creates a line item for each expense, Tanisha checks how close she is to the 50/30/20 split. Her “needs” come out to about 60%, which makes sense since she’s supporting three people with one income. She compares her expenses to her income to make sure everything’s covered, sets up time once a week to check her progress, and she’s off and running!
Make it work for you
Here are some practical tips on using the 50/30/20 rule:
- The difference between “needs” and “wants” is deeply personal; for example, hiring a tax professional is a nice luxury for some folks, and essential for others.
- That last 20% is savings and any debt payments over the required minimum. You decide how to split it up based on your current needs. Paying the minimum on your credit card may be a “need,” but putting extra money in to pay down that debt can be factored into your “savings and debt” category. And you can adjust as your life changes!
- You can always shift the 50/30/20 percentages to fit your life; if you’ve got high-interest credit card bills pinching your budget, you might decide to put 30% toward paying down debt and only 20% towards wants. Just try to stay in the ballpark.
- You don’t have to stick with one strategy forever! Give one a shot and see how it goes for you, and expect to learn and adjust as you go. If it’s not meeting your needs, try out another method!
- Don’t want to assign every single dollar to a category? No problem! Create your needs and savings categories, budget for the “wants” you’ve planned in advance, and then keep the leftovers in your Safe-to-Spend® for spontaneous spending on wants you didn’t plan for. If you find the perfect pair of shoes on sale but you haven’t budgeted for them, you can pull from your Safe-to-Spend—assuming it has enough money in it. Think of it as an extra buffer between you and overspending!
How to create a 50/30/20 budget in your Simple Account
Your Simple Account has tools built right in that will help you stay on track. After you plan your budget, just create an Expense for each need, want, and debt line item, and set up a Goal for each savings line item.
Once you’ve got your budget set up in your Simple Account, we automatically track your spending and move money into your Expenses and Goals for you. And Safe-to-Spend® has your back with instant access to the amount you can spend spontaneously—without blowing your budget.
With your 50/30/20 budget template and Simple’s free budgeting tools, you’ve got this whole money-management thing nailed!
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