Split your monthly net income into needs, wants and savings using the 50/30/20 rule. Instant results, no sign-up required.
⚠ The figures are indicative and based on typical distributions. The ideal allocation depends on your specific situation — income, debts, where you live and your financial goals.
The 50/30/20 rule is a simple personal budgeting method that divides monthly net income into three categories: 50% needs (rent/mortgage, food, transport, insurance, utilities), 30% wants (restaurants, entertainment, clothing, subscriptions, travel) and 20% savings and investment (emergency fund, ISA/ETFs, extra debt repayment).
It was popularised by Harvard law professor Elizabeth Warren in her 2005 book All Your Worth. It has since become one of the most widely used personal budgeting frameworks worldwide, thanks to its simplicity — you only need your net income to get started.
Start by identifying your monthly net income (after tax and National Insurance). Then categorise each expense: housing, food and transport go under needs; Netflix, gym and dining out go under wants. If your needs exceed 50%, look for ways to reduce them over time — or temporarily adjust to 60/20/20.
The 20% savings allocation is the engine of your long-term financial security. The recommended order: first pay off high-cost debt (credit cards, personal loans), then build an emergency fund (3–6 months of expenses), then invest regularly — even £50/month in a low-cost index fund is a powerful start.
From the 50/30/20 method to getting out of debt and making your first investment — all explained in plain language.
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