A simple way to take control of your money.
Let’s be honest: Budgeting can feel like a four-letter word.
For some of us, it’s a routine part of life. For others, simply hearing the word makes us want to run in the opposite direction.
The truth is, budgeting is personal. And whether you’re already pretty good with your money or you have no idea where to start, the good news is there’s a simple approach that works for just about anyone.
It’s called the 50/30/20 rule.
What is the 50/30/20 rule?
The 50/30/20 rule divides your take-home pay into three broad categories:
- 50 percent to needs: Things you can’t live without, like rent, groceries, medications, utilities and transportation.
- 30 percent to wants: Also known as discretionary spending, this includes things like dining out, entertainment, hobbies and gifts.
- 20 percent to financial goals: This includes saving, investing and paying off debt.
Why is the 50/30/20 rule a helpful framework? Because it’s easy to follow, doesn’t require a spreadsheet and scales with your income. Whether you bring in $2,000 a month or $10,000, the percentages stay the same. It gives you a structure without boxing you in.
Below, I break down how to apply the 50/30/20 rule to your own finances.
Step 1: Know Your Income
Start by calculating your monthly take-home pay.
That includes all the money you can count on every month — wages from work, disability benefits, SSI or freelance gigs.
If your income varies, base your budget on your lowest month in the last six months, or the average of your three lowest months in the last year. Be conservative. It’s better to base your income on less and have a little extra money at the end of the month than to overestimate your earnings and come up short later.
Step 2: Track Your Needs
List all your monthly essentials, which includes:
- Housing
- Utilities (water and electric)
- Groceries
- Prescriptions
- Internet
- Phone
- Transportation
- Minimum debt payments
If the cost changes each month (like your electric bill or groceries), figure out an average based on your past three months of spending in that category.
Once you’ve totaled up all your needs, calculate what percentage of your income is going to cover these costs.
Pro tip: Use a percentage calculator app, an online percentage calculator like this one or Chat GPT to figure out the percentage of your take home pay that is going to necessities. Or you can even ask Siri (i.e. Siri, $1,000 is what percent of $3,000?)
If it’s more than 50 percent, you’ve got two choices: Cut expenses or increase your income.
Housing is usually the biggest expense. If your rent or mortgage is eating up too much of your income, that’s where you’ll see the biggest impact by making a change — whether it’s getting a roommate, relocating or moving in with family temporarily. Other bills like groceries and phone plans can be trimmed, but they won’t move the needle like housing can.
Step 3: Set Your Wants Limit
Wants are your flex money. If you take home $3,000 a month, you get $900 to spend on things that make life enjoyable — eating out, shopping, entertainment. You don’t have to spend it all, but don’t go over 30percent.
Pro tip: Audit your subscriptions, use cash or prepaid cards to stay on track and plan ahead for gift giving. When possible, try free or low-cost alternatives, like utilizing your local libraries or checking out free community events.
Step 4: Set Aside 20 Percent for Financial Goals
The last 20 percent of your income is earmarked for savings, investing and paying off debt. Start small if you have to — even 5 percent is better than nothing.
If you’ve got credit card debt, knock that out first. The interest is silently stealing money from your budget. Student loans and mortgages can usually wait.
But remember: Your minimum debt payments belong in the 50 percent “needs” category. This 20 percent is extra money you can use to build wealth or crush debt faster.
Plan for Those Not-So-Regular Expenses
Not everything hits monthly. Things like holiday spending, quarterly bills or annual subscriptions should be spread out across the year using a “sinking fund.” If a bill is $300 every three months, save $100 a month for it. That way, you’re not caught off guard.
Keep Tabs on Your Budget
Budgeting isn’t a one-and-done deal. Set aside 10–15 minutes each week to review your spending. You’ll spot problems early and avoid those “where did all my money go?” moments.
What if the 50/30/20 Rule Doesn’t Work for Me?
If you aren’t earning much money or have high monthly bills, you may need to rebalance your budget.
You might need to shift the rule temporarily — say, 60/20/20 or 70/20/10.
Just make sure you still pay the minimum on debts and find some way to save, even $10 a week.
Budgeting With Vision Loss? You’ve Got This.
Living with vision loss comes with unique challenges, but taking control of your money is 100 percent possible.
Budgeting gives you clarity and power — two things that are easy to lose when life feels chaotic.
If you want help building a budget that actually fits your life, I’m here to help. Send me an email or set up a free 30-minute call. Let’s make your money work for you.
