50 30 20 Budget Rule Finance Tracker
About this template
Welcome to our 50/30/20 budget rule, Finance Tracker Notion Template.
Have you heard of the 50/30/20 budget rule?
Budgeting is made simple with the 50/30/20 budget rule, which splits your after-tax income into three categories: needs, wants, and savings. This principle offers an effective strategy for managing your finances:
Spend 50% of your money on needs.
To follow this budget, 50% of your after-tax income should be spent on your needs. Needs are payments for essential expenses that are difficult to live without, including monthly rent, electricity and gas bills, transportation, insurance (for healthcare, car, or pets), minimum loan repayments, and basic groceries. For example, if your monthly after-tax income is $2000, $1000 should be allocated to your needs.
Spend 30% of your money on wants.
30% of your after-tax income can be used for your wants. Wants are non-essential expenses, such as dining out, shopping for clothes, holiday trips, gym memberships, entertainment subscriptions (Netflix, HBO, Amazon Prime), etc. Using the same example above, if your monthly after-tax income is $2000, you can spend $600 for your wants.
Stash 20% of your money for savings
20% of your monthly income should be saved to achieve your savings goals or pay back any outstanding debts. Consistently putting aside 20% of your pay each month can help you build a better savings plan. For example, if you bring home $2000 after tax each month, you could put $400 towards your savings goals. In just a year, you’ll have saved close to $5000!
This method empowers you to minimize unnecessary expenses while maximizing your savings for the future.
