The 50/30/20 Rule Is Dead—Here’s What to Do Instead

The 50/30/20 rule is about as outdated as flip phones and Blockbuster. It tells you to split your income into 50% needs, 30% wants, and 20% savings. Sounds simple, right? The problem? It’s wildly outdated—like trying to buy a house with the same budget you had in 2010.

Here’s why the 50/30/20 rule no longer makes sense:

• Housing Costs Are Insane – If you live in a city, good luck keeping rent under 50% of your income.

• Lifestyle Inflation Is Real – That “wants” category is way too broad. Streaming services, gym memberships, and the occasional overpriced latte add up fast.

• Saving 20%? LOL. – With debt, rising costs, and the need to invest aggressively, saving a flat 20% isn’t a magic bullet anymore.

The Smarter Budgeting Approach: 60/30/10

Here’s a modern, no-BS way to handle your money:

1. 60% - Essentials & Fixed Costs – This covers rent/mortgage, bills, groceries, insurance—basically, stuff that keeps you alive and functioning. If this is higher, your lifestyle might need a trim.

2. 30% - Growth & Wealth-Building – This is your investment money. Not just saving, but actually making your money work—stocks, retirement, side hustles, high-yield accounts. Future-you will thank you.

3. 10% - Guilt-Free Spending – This is where your fun money goes. Want to spend $6 on oat milk lattes? Do it—just know your cap.

Why does this work? Because it prioritizes wealth-building. Instead of blindly saving 20%, you’re putting 30% toward actually growing your money. And instead of allocating 30% to “wants” (which can get out of hand fast), you’re limiting discretionary spending so your future isn’t stuck playing catch-up.

Your Move

Try the 60/30/10 rule for a month and see how it feels. Need to tweak it? Cool. The point is to make your budget work for you, not the other way around. Reply and let me know what you think—or, if you’re feeling bold, drop a tweet with your own budgeting breakdown.

Now go make your money work. 💰