The 50/30/20 budget
A simple starting framework, made popular by US Senator Elizabeth Warren, for dividing your after-tax income:
- 50% Needs: rent or mortgage, utilities, groceries, transportation, insurance, minimum debt payments.
- 30% Wants: dining out, entertainment, hobbies, shopping, travel.
- 20% Savings & debt payoff: emergency fund, retirement, investing, and paying debt down faster.
In high-cost cities, needs often run higher. That's fine: treat the targets as a compass, not a rule. The most important habit is to give every dollar a job and check your actual spending against the plan each month. The downloaded spreadsheet's Tracker tab is built for exactly that.