50/30/20 rule- coins and calculator

Does the 50/30/20 Rule Really Work?

There are a lot of different saving rules and methods out there that people like to try, but the majority of them make savings difficult and confusing. Some methods work for some people and not others. For example, saving with coins and a jar wouldn’t work for someone who uses their card and not cash. So, you really need to put plenty of thought, trial and error and effort into different techniques to find the one suitable for you. What you want to know is does the 50/30/20 rule really work or is it just another pointless way to save?

What is the 50/30/20 rule?

The 50/30/20 rule is a method of saving to help people get on top of their finances and strengthen their money management. So, the technique states that you should split your income into three sections. So, firstly 50% should be spent on the essentials. This could be anything from bills to food. Second of all, you need to give yourself some money to treat yourself so 30% is to be spent on your wants. For example, a meal with friends or a hair cut. Lastly, the remaining 20% should be saved. This way you can easily build up an income to fall back on if you need it instead of having to turn to a loan.

How To Start This Method?

To begin doing this method you need to ensure that you know exactly how much goes into your account and goes out every month.  Or if you use cash, you need to understand how much cash you have. This way you can see what things are essential and what are not. Once you have worked this out, you should take your income and divide it into the three sections listed above. If you think that 50% isn’t enough for the essentials perhaps this method isn’t the best one for you, or maybe you haven’t properly sorted through what essentials are. After this, you are ready to begin.

What are ‘essentials’?

  • Tax
  • Bills – Water/Energy
  • Travel
  • Food
  • Debts

What are ‘wants’?

  • Gym Memberships
  • Hair Cuts
  • Meals Out
  • Trips Out
  • Makeup

What are you saving for?

  • Unexpected Bills
  • A Rainy Day
  • Pension Contributions

Does it work for everyone?

Unfortunately, this method might not work for everyone due to the variations in salaries and incomes. But, to fit your salary, you could change around the percentages. Although, you need to make sure that there is always a minimum of 20% being saved or you will not be able to build up any savings.  You could reduce the amount spent on your essentials or wants so that you have more saved, but ensure your percentages suit your lifestyle before changing them.


There are plenty of other methods out there which you can use if this one doesn’t suit you. The internet is full of ways to save and ideas on how to begin your savings journey. If you struggle to save and you find yourself needing money, whether it be a small or large amount, Simple Personal Loans could help with their personal loans.

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