50 - 30 - 20 Spending Plan

I recently read in a magazine a plan to get your finances back in line and to save money at the same time. It is called the 50, 30, 20 plan.

The 50 part is 50% of your pay goes towards things you absolutely need such as food, medicine and electricity. The 30 is 30% of your pay goes towards things you want like a cell phone, cable television, and internet usage. The 20 is 20% of your pay goes towards savings.


I have begun to limit using what money we have left over from the "have to have" list and the "want list". I have started banking the 20% in my savings account. It is really easier than you think. Neither my husband nor I are paid an exorbitant amount each month, but we do spend money on things we do not need. Since the checks come in at different times, I have found it is easier to take the 20% off the top before I pay the bills. If push came to shove, I could always go into the savings account and take the money out.

There are many good aspects to this plan. It opens your eyes to see what you are really spending your money on and what you really do not need to spend your money on. Also the added benefit of having some savings really does make you rest a little more comfortable. After paying all the bills this month, I actually had money left over which is very unusual. I am looking forward to honestly see what I can delete in my billing and not really miss the loss. I have found it very useful and I hope you do as well. A little nest egg really can make a big difference.

By Gem from VA

June 8, 20110 found this helpful

I like this idea and am already in the planning stages of doing this. :) Thanks for the great tip!

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June 8, 20110 found this helpful

Hello, You have a good plan. Do you add the housing cost to the 50 part? You didn't mention it.

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June 8, 20110 found this helpful

Yes you allow the housing cost as it is an essential need and goes in the 50%. Thanks for your feedback. So glad I can help someone else. What I have already added to my account is up to 700.00 in the past 2 and a half months.

It is working great for me and when temptation tries to over rule me I simply remind myself I am on a strict budget.

Thanks again for your feedback.


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June 8, 20110 found this helpful

Sounds like a plan if you have money enough to do it with...but my mortgage payment including property taxes is already 66% of my limited income! Groceries can cost twice as much as other people pay because I need to avoid eating wheat and soy products, which are hidden almost everywhere you look, even in meats. A single loaf of wheat-free bread is $5.99! My income pays for mortgage, property taxes, and basic food. I look for contract work wherever I can find it to make money for utilities, auto expenses, etc. If I had enough income to pay for basics with only 50% of it I would think it was a dream come true!

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Anonymous Flag
September 23, 20120 found this helpful

This is fine if you make a decent income but impossible for many who are just trying to survive in this terrible economy. More power to you and your hubby in this new way of managing your money!

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Anonymous Flag
September 23, 20120 found this helpful

To Gem from VA - Great idea, however 50% of my monthly income (disability) would never be enough to pay all my bills, i.e., mortgage, utilities, etc. But, thanks for the thought and I'm glad it works for you.

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