The 50/30/20 Rule Sucks - Try This Instead

Why cookie-cutter budgets fail and what to do instead

Noah

Jun 10, 2025

You’ve probably seen the “50/30/20" Rule” a hundred times:

50% of your income goes to needs
30% goes to wants
20% goes to savings/debt

It’s everywhere.
It’s simple.
And for most people?

It doesn’t work.

🫨 Real Life Doesn’t Split That Cleanly

Let’s be real:

If you’re living on $3,000/month and rent is $1,500, guess what? That’s already 50% gone — before groceries, gas, or utilities.
Or maybe you’re making $8,000/month and only spending $2,500. Do you really want to give yourself permission to blow 30% on “wants”?

🔁 A Better Rule: Flip It

Here’s what I teach instead:

Flip the rule — Pay Yourself First
Set your savings goal FIRST (even if it’s 10%)
Cover your needs SECOND
Spend what’s left GUILT-FREE

Because what gets saved first, gets kept.
Everything else gets spent.

🧠 Example:

Let’s say you bring in $4,000/month.

Old Rule:

Needs 50% = $2,000
Wants 30% = $1,200
Save 20% = $800

There’s a really good chance that you don’t end up saving that 20%.

New Rule:

Save 15% off the top = $600
Needs = $2,200
Wants = $1,200
(Adjust the mix based on your real numbers, not some internet formula)

This ensures that you save what you want first, then use the rest on needs and wants.

✅ Bottom Line

Simple Rule: Save first. Spend what’s left.

Automate it.
Make it boring.
Stop chasing some else’s budget ratio.

💬 Want more?
I’m working on a simple worksheet so you can build your very own “pay yourself first” plan! Comment “Send it to me” and I’ll put you on the early release list!