You may have heard of the 50/30/20 budget before. Possibly you heard it in passing. Or maybe you’ve attempted to use this budgeting plan in the past. You may or may not have known the 50/30/20 budget was actually created by U.S. Senator Elizabeth Warren, making it well-known in her book All Your Worth: The Ultimate Lifetime Money Plan.

How Closely Should You Follow the 50/30/20 Rule of Budgeting?


The budget can be broken down in a pretty simple way. Each of the numbers in the title represents a certain percentage of your after-tax income that should be dedicated to different expenses. Here’s how it breaks down:


  • Needs: 50 percent of your income should go to “needs.” These are things that should be considered your bare necessities in life, such as rent or mortgage payments, your car payment, utilities, minimum debt payments, insurance and groceries. There may be other things you need that aren’t on that list. However, nothing should be included in that expense if you can reasonably live without it.


  • Wants: 30 percent of your income should go to “wants.” This can be considered the most fun category of them all. Your wants are the things you, well, actually want to spend your money on. This could include nights out on the town, going on vacation, memberships to the gym or a streaming service. The list can go on and on. It’s important your budget doesn’t become inundated by wants so you don’t have enough left for needs, or the important final category.


  • Savings: 20 percent of your income should go to saving. The majority of U.S. citizens can’t afford to cover a $1,000 emergency. There’s a multitude of reasons for this problem. Regardless, it highlights the importance of doing what you can to save money.


What If You Can’t Make The 50/30/20 Budget Work?

A lot of people reading this are probably thinking the same thing: “There’s no way I could dedicate 30 percent of my income to wants and 20 percent to saving.” It’s just financially impossible to do this for many.


Debt is one of the biggest factors stopping regular people from being able to do things like save money or dedicate up to 30 percent of their budget to “wants.” Total consumer debt in the United States now sits at around $14 trillion. That’s a number that’s so big it’s hard to even fathom it. Mortgages and auto loans are the two top reasons for consumer debt. But student loans and credit card debt are growing quickly.


What are you supposed to do when you’re struggling to make these debt payments? You want to be saving money and spending on things you want, but it seems there’s never enough to go around. People in this situation might want to consider the benefits of working with a debt relief agency. Reading through Freedom Debt Relief reviews, you’ll see that many people have been able to settle their debts — meaning they’re able to zero them out for a percentage of the original balance. Some people are even able to totally eliminate their debts in as little as 24 to 48 months, which eventually frees up more money each month for needs, wants and saving.


Debt is something that can keep you sidelined in ways that aren’t fair to you, your family or your community. You shouldn’t have to be fighting your whole life just to not owe anyone anything. Working with experts who can potentially help reduce what you owe is one path to financial freedom sooner.


It’s always wise to stick to a budget. Doing this lets you know exactly how much money you’re bringing in, and where it’s going. You can do this even if you find the 50/30/20 budget doesn’t work for you.