Budgeting basics: the 50/30/20 rule

Payday is always exciting, but making your money last can be a challenge. It's easy to forget about budgeting and you might end up spending money without thinking. That's where the 50/30/20 rule comes into play — a straightforward strategy to keep your finances in check. With Revolut, organising your salary into categories is a breeze.

What is the 50/30/20 rule?

The 50/30/20 rule is a budgeting method you can use to manage your money. It splits your income after taxes into 3 parts:

Needs (50%)

Set aside half of your income for essential expenses like rent, utilities, groceries, and transportation. These are the costs you must cover to maintain a basic standard of living.

Wants (30%)

Allocate 30% of your income to things you enjoy. This could be dining out, entertainment, hobbies, and other non-essential purchases. Basically, all the fun stuff.

Savings (20%)

The rest of your salary gets put towards savings, investments, or paying off debt. Saving for something big like a new kitchen or paying off student loans? This last 20% will help you keep moving forward towards your goal.

While the 50/30/20 rule offers a helpful framework, it isn’t one-size-fits-all. Your unique circumstances, including where you live, inflation rates, and personal financial goals, may affect your ideal budget. Whatever your ideal ratios, having a balanced approach to your spending and saving can help you supercharge your money management with minimal effort.

Master the 50/30/20 rule with Revolut

There’s no need to scramble to divvy up your salary. Next payday, you can kick back and relax — we’ve got it covered for you. With Revolut, you can set aside your money automatically, for effortless financial management. Here’s how:

1. Automate your bills with a Bills Pocket

Let us manage your bills, so you can forget about them. Create a dedicated Bills Pocket, link your fixed expenses, like Direct Debits and recurring transfers, and they'll be paid automatically. Set aside the amount you need in your Bills Pocket and we'll take care of the rest.

2. Grow your savings automatically

When you save 20% of your salary, you'll build a nest egg that grows with every paycheck, and reach your savings goals faster. Think of it as paying your future self first — whether it's for a spontaneous trip, home renovations, or a safety net for 'just in case'.

3. Set up a ‘fun things’ Pocket

Meet your new best friend: the 'wants' Pocket. With the 50/30/20 rule, you've got 30% of your budget to for whatever your heart desires. Just transfer money to your main account whenever you spend.

Start budgeting, the easy way

The 50/30/20 rule is a tried-and-true strategy for smart budgeting, and when you sort your salary with Revolut, it’s easier than ever to put into practice. Distribute your salary into needs, wants, and savings to streamline your budgeting process, save money, and maintain financial discipline. Now that’s satisfying.