That Girl Finances: The 50/30/20 Budgeting Method
Managing money can feel overwhelming—especially with rising prices and endless financial advice. Whether you're trying to build your savings or keep up with everyday expenses, it's easy to feel unsure where to start. But finding a simple budgeting structure can put you in control, help you track spending, and make money decisions that benefit your present and future self. The 50/30/20 Rule is a budgeting method financial experts love because it’s easy, flexible, and leaves space for fun, bills, and savings.
No matter your income or lifestyle, having a budget is essential for staying on track. The beauty of the 50/30/20 Rule? Rule doesn’t micromanage your spending. Instead, it gives you a simple guide—dividing your money between wants, needs, and savings—so you can make choices that work for you.
A clear, simple plan makes reaching your goals easier, shopping smarter, and feeling confident about your money—no matter what life throws your way.
What is the 50/30/20 Rule?
Senator Elizabeth Warren and her daughter, Amelia Warren Tyagi, popularised the 50/30/20 technique in their book All Your Worth: The Ultimate Lifetime Money Plan.
Here’s how it works: Take your monthly income (after tax) and split it into three categories—50% goes to your needs (think: rent, groceries, bills), 30% to your wants (dinners out, shopping, fun extras), and 20% to savings (future you will thank you!).
Why it Works
The magic of this method is in its simplicity. You’ll always know how much to set aside, and you get to treat yourself without guilt—no more guessing games or strict diets for your wallet!
Let’s be honest—budgets can fail when they feel too strict. If you’re not allowed any fun, it’s easy to go on an impulse shopping spree and break the plan. The 50/30/20 rule leaves room for treats and experiences, making it much easier to stick with long-term goals.
When you can pay for what you need and want, budgeting feels doable—and you can enjoy your money after working so hard.
How to Make the 50/30/20 Rule Work for You
Start with Your Monthly Income
Look at your monthly take-home pay—what do you actually have to spend after taxes or business expenses?
Categorise Your Spending
Grab last month’s bank statement and sort your spending into needs, wants, and savings. Ask yourself: Is this essential, or could I cut back? Being honest about your habits is the key to making this rule work for you.
For example, try swapping a few takeout meals for fun nights, such as hosting a girl’s night, enjoying a DIY date, or cooking something special at home. You’ll save money and still get to treat yourself.
Personalise Your Plan
Once you’ve sorted your spending, see how it stacks up against the 50/30/20 Rule. Rule: You’re over in one area (usually wants!), so look for small ways to adjust. Shift your plan to fit your goals and real life—no guilt, just progress. And remember, some months will look different—maybe you have a big event, extra bills, or a financial curveball. It’s okay to adjust the percentages as needed. The goal is progress, not perfection! Look for little ways to save—shop sales, try thrift shopping, or swap daily coffee runs for homemade brews. Small changes add up to big wins for your wallet!
Track Your Progress
Keep tabs on your spending with a planner or spreadsheet—it’s the best way to see your progress and stay motivated. If you find it challenging to rein in spending (especially with social media tempting you!), try separating your money—one account for bills, one for fun. It’s a simple trick that makes budgeting more straightforward to stick with.
No matter what you earn, taking control of your finances is empowering and worth it. The 50/30/20 rule is a smart, simple way to become that woman who makes confident money moves and sets herself up for success, now and in the future.