What is 50/30/20 rule?
The 50/30/20 rule is a budgeting rule of thumb that splits take-home pay into about 50% for needs, 30% for wants and 20% for saving and extra debt payments. It was popularised by Elizabeth Warren and Amelia Warren Tyagi in their 2005 book All Your Worth.
Why 50/30/20 rule matters
It is a quick check on a budget, not a target everyone must hit; high housing costs or high debt often bend the split.