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What is the Difference Between 50 30 20 and 70 20 10 Budget Rule?

Updated: Mar 20, 2022

Learn what 50 30 20 and 70 20 10 really means and how you can apply it towards your budgeting.

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TL:DWTR? Check out my TikTok video that talks about the different budgeting rules of personal finance!


+ What is the 50 30 20 budget rule?

+ What is the 70 20 10 budget rule?

+ Are there other budget rules I don't know about?

+ Why are these budget rules helpful?

+ Which budget rule should I use?

What is the 50 30 20 budget rule?

You, like many others, have heard about this 50 30 20 rule of thumb for budgeting. But what exactly does that mean? It's really a simplified way of breaking down your monthly budget. Your after-tax income should really be broken out into 3 main buckets: needs (which account for 50% of your after-tax income), wants (which account for 30% of your after-tax income) and savings/debt repayment (which is the remaining 20%).