50/30/20 Rule: The Complete Guide to Managing Your Budget
Discover the 50/30/20 budget rule, a simple and effective method to allocate your income and reach your financial goals.
What is the 50/30/20 rule?
The 50/30/20 rule is a budgeting method popularized by Elizabeth Warren that helps you allocate your net income in a balanced way:
- •50% for your essential needs - Rent, groceries, bills, transportation, insurance
- •30% for your wants and leisure - Dining out, entertainment, subscriptions, shopping
- •20% for your savings - Emergency fund, projects, investments
How to apply the 50/30/20 rule?
1Calculate your monthly net income
Add up all your after-tax income: salary, bonuses, supplemental income. This is your calculation base.
2Allocate according to the 50/30/20 rule
Example with $3,000 net income per month:
- • $1,500 for needs (50%)
- • $900 for wants (30%)
- • $600 for savings (20%)
3Track your expenses regularly
Use a budget app like Trya to automatically categorize your expenses and check that you're sticking to the percentages.
The 3 categories in detail
50% - Essential needs
These are the non-negotiable expenses for daily living:
- • Rent or mortgage
- • Groceries
- • Utilities (water, electricity, gas)
- • Transportation (fuel, transit pass)
- • Required insurance
- • Healthcare (insurance, doctor visits)
30% - Wants and leisure
What makes life enjoyable but isn't essential:
- • Dining out and entertainment
- • Shopping (clothing, etc.)
- • Subscriptions (Netflix, Spotify)
- • Vacations and weekend trips
- • Hobbies and leisure activities
- • Gifts
20% - Savings and goals
To build your financial security and fund your projects:
- • Emergency fund
- • Debt repayment
- • Projects (home purchase, car)
- • Investments (stocks, retirement accounts)
- • Retirement
- • Personal goals
The advantages of the 50/30/20 rule
Simple to understand and apply
No need to be a finance expert, the rule is clear and easy to follow.
Life/savings balance
Lets you enjoy the present (30% leisure) while preparing for the future (20% savings).
Adaptable to all income levels
Works whether you earn $2,000 or $7,000 per month, the proportions stay the same.
Forces automatic saving
The 20% savings becomes a habit, ensuring financial security.
Our tips for success
Automate your savings
Set up an automatic transfer of 20% to your savings account on payday.
Adjust the percentages if needed
If your needs exceed 50% (high rent), temporarily adjust to 60/25/15 for example.
Use Trya to track automatically
The app categorizes your expenses and tells you if you're following the 50/30/20 rule.
Reassess regularly
Check every quarter that the allocation still matches your situation.
Apply the 50/30/20 rule with Trya
Trya automatically creates your budget using the 50/30/20 method powered by AI. Track your expenses in real time and reach your financial goals.