The 50/20/30 Budgeting Guide for Millennials

Of all the things they teach in schools, from the Pythagorean theorem to APA format, why personal finance and budgeting is not made a priority is beyond me. Whether you’re learning how to run your household or living the college dorm, ramen noodles dream, managing your budget and controlling your money is a learned skill set that will benefit you in every single stage of your life. The 50/20/30 rule is one way I was able to get keep on top of everything that came in and out of my bank account, and made it easier to accomplish the goals I had set for myself and for my family. It’s a proportion guideline that can help create a workable budget based on your income and build healthy finance habits that last a lifetime.


50 – Essentials

50% of your income (or less if you can manage it!) should go directly to your NEEDS. These needs are nearly the same for everyone, and include things like your housing (rent, mortgage, home insurance, etc.), utilities, food, and transportation (public transportation pass, car payment, auto insurance, etc.). Some of these costs will be fixed by their nature, but those that aren’t you should try to keep as close to a fixed number as possible (ie, a weekly or monthly grocery budget).

20 – Savings & Contributions

20% of your income should be directed towards things that may not fall into the ‘Essentials’ category, but are still pretty important in shaping a long-term plan. Think of it as your “get ahead” category. Pay off debt, pay into a retirement fund, save some money for emergencies, and make strides in things that might not make a whole lot of sense at 24, but will have you patting yourself on the back at 55. The earlier you start, the better.

30 – Wants

Yes, you can actually budget for fun! 30% of your income can go towards whatever your heart desires, from mani/pedis to gym memberships!


A strict adherence to this guideline isn’t necessary to get the results you want, but it is helpful to know what a somewhat balanced budget is to build your life around. More than anything, be honest with yourself about the function of all of the “things” in your life. For one person, a smartphone might fall into their 30% Wants, whereas for someone who travels extensively and requires a certain level of functionality, that same smartphone might be less luxury and more business. You’ll learn to make adjustments where they’re needed and design a sound financial strategy that makes perfect sense for you.

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