50/30/20 as a first budget

Aim 50% of take-home pay at needs, 30% at wants, 20% at saving and debt paydown.

Why it works

A starting allocation, not a law — its real job is forcing the three categories to be looked at separately at all.

Do it exactly

Estimate with the rule, then check it against the calculator that models it properly.

Open Salary Converter →

More in Finance

• The Rule of 72Money doubles in about 72 ÷ (interest rate %) years.
• Double the tax, round upIn the US, doubling the sales tax on the receipt gives a quick tip estimate.
• 114 triples, 144 quadruplesDivide 114 by the rate for tripling time, 144 for quadrupling.
• Ten years earlier ≈ twice the potAt typical market returns, starting to invest 10 years earlier roughly doubles your final balanc…

Browse all 96 rules of thumb →