Split your income into needs, wants, and savings.
The 50/30/20 rule is a simple budgeting framework that divides your income into three buckets: needs (50%), wants (30%), and savings (20%).
Its power lies in simplicity: instead of tracking dozens of categories, you focus on balance.
Essential expenses required to live and maintain stability.
Non-essential spending that improves quality of life.
Money allocated to future goals, investing, and debt payoff.
With $4,000 income: Needs $2,000, Wants $1,200, Savings $800.