The 50/30/20 method: the simplest budget in the world

If you only remember one budgeting method, make it this one. The 50/30/20 rule splits your income into three parts, and that's it. It was popularised by Elizabeth Warren in a book on personal finance, and it remains the ideal entry point.

How it works

You take your net income and divide it up:

• 50% for needs: rent, groceries, transport, bills, insurance. Everything you need to live.
• 30% for wants: restaurants, outings, shopping, fun subscriptions, travel.
• 20% for savings: your safety net, your projects, paying down debt.

Three numbers, three envelopes. Nothing more.

Worked examples

With €1,800 net a month:

• Needs: €900
• Wants: €540
• Savings: €360

With €3,000 net a month:

• Needs: €1,500
• Wants: €900
• Savings: €600

For a couple with a combined €4,500, the rule applies to household income: €2,250 for needs, €1,350 for wants, €900 for savings.

Need or want: where's the line?

It's the question that always comes up. A good test: "if I lost my job tomorrow, would I keep paying for this?"

• Need: rent, insurance, basic groceries, your transport pass, a phone plan.
• Want: restaurants, the second streaming service, a premium phone plan beyond what you need, fashion.
• Savings: transfers to your savings account, investments, extra debt repayments.

Why it works so well

Most budgets fail because they're too detailed. Twenty categories to track, and you give up after two weeks.

50/30/20 does the opposite: it groups things together. You only have three numbers to watch. Precise enough to stay on track, simple enough to keep up over time. And when you want more precision, zero-based budgeting takes over.

Adapt the numbers to your reality

The percentages aren't sacred. If you live in a big city where rent eats 40% of your income, your "needs" share will be higher, and that's OK. Some common variants:

• 60/20/20: high rent, you cut wants, not savings.
• 70/20/10: modest income, essentials first, savings anyway.
• 40/30/30: comfortable income or an ambitious goal (buying a home).

What matters: your savings share should never drop to zero. Even 5% is better than nothing. The habit matters more than the amount.

Put it on autopilot

The only real effort is sorting each expense into the right share. Done by hand, it gets tedious fast.

In Trya, the 50/30/20 method runs on autopilot: every category belongs to one of three buckets (Essential needs, Pleasures & wants, Savings & projects), and your synced spending is sorted by AI. Enter your income, household and spending style, and the app suggests a starter budget inspired by 50/30/20 and adjusted to your situation. Tweak it as you like, and see at a glance whether you're respecting your split, without ever keeping a spreadsheet.

Frequently asked questions