With the silly season upon us and a new year around the corner, itโs never been a better time to start getting on top of our finances.
As dull as the topic sounds, the stigma around money chat can leave us scrambling, always wondering if weโre even close to getting it right. We know why itโs important to be financially independent, and retain a nest egg for rainy days or future goals, but where do we even begin?
Well, since weโre sadly not working with free-flowing funds, budgeting really is the answer.
But though the very word may induce a shudder, the viral hype around the โ50/20/30โฒ budgeting rule actually holds up.
Even if youโd rather do just about anything but look at your accounts, keeping track of your expenditures isnโt as complicated as you think. And no matter where you sit on the tax bracket, the rule can be tailored to suit anyone.
So whether youโre considering getting smart about your money before the holiday season or youโre simply preparing for a desperate recovery of depleted funds post-holidays, this low-effort approach to saving money could make all the difference. Read on for our tips on making it work for you.
What is the 50/20/30 rule?
Proliferated by U.S. Senator Elizabeth Warren in her co-authored novel, All Your Worth: The Ultimate Lifetime Money Plan, the 50/20/30 rule is a flexible budgeting method that works to categorise your spending and distribute your pay accordingly.
No matter what your lifestyle, income or goals, the method can be adjusted to suit even the laziest of us chronic over-spenders.

How does the 50/20/30 budget rule work?
Before you start looking at your spending, you want to firstly figure out your take-home income. From there, as the name would suggest, the rule simply involves splitting up your spending into three percentiles; 50%, 20% and 30% which fall into the buckets of needs, goals and wants. Allow us to break them downโฆ
Needs (50%)
Needs covers all the things you literally couldnโt live withoutโthink rent, bills, transport and groceries, not your coffee habit. Half of your take-home pay should be kept aside for these expenses.
Now, this can obviously feel a bit ambiguous, and weโre all include to think we need things we may not, but try not to overthink it. If you have to rationalise why you need it, itโs probably more of a want.
Goals (20%)
Next, youโre going to take 20% of your income and put it towards goals. This includes expenses like debt payoff, holiday plans, or even just a high-end bag youโve been eyeing off.
And even if you donโt have anything youโre specifically paying off, itโs good to be ensuring some of your money is being kept aside for a rainy day.
Wants (30%)
Spending 30% of your pay on โwantsโ may sound pretty nice, but remember that many of our needs are actually wants. Your Netflix subscription? Uber plus account? Seasonal wardrobe update? All regrettably fall into wants. They may add value to your life, but if you could physically live without it, then itโs unfortunately got to take up space in this category.
With those expenses includes, 30% might not end up feeling like very much but will ensure that you have some decent foresight of whatโs appropriate to be spending on takeout, socialising and other little luxuries for that particular pay cycle.
Whatโs the downside?
Well, itโs really up to you to categories your outgoings. Where we go wrong with the rule is being unrealistic about what we really need and not holding ourselves accountable by keeping track of it all.
That said, even if youโre not one to take a granular approach to your finances, the rule encourages us to confront our spending habits, and take a bigger-picture approach to saving. Not to mention, the flexibility allows us the freedom we need when life throws us curveballs.