The 50/30/20 Budget Rule: Step-by-Step for Beginners

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The 50/30/20 Budget Rule: Step-by-Step for Beginners

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Senator Elizabeth Warren popularized the 50/30/20 rule in her book All Your Worth. It’s the simplest way to budget without spreadsheets.

Breakdown (Take-Home Pay)

  • 50% Needs: Rent, groceries, utilities, insurance
  • 30% Wants: Dining out, Netflix, hobbies
  • 20% Savings/Debt: Emergency fund, 401(k), credit cards

2026 Example: $4,000 Net Income

  • Needs: $2,000 (rent $1,200 + food $400 + bills)
  • Wants: $1,200 (travel, shopping)
  • Savings: $800 (auto to Roth IRA)

Free Tools

  • Printable PDF calculator (upload this!)
  • YNAB (You Need A Budget) — $14.99/mo

Related: Frugal Grocery Hacks — cut “Needs” by $200/mo.

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