50/30/20 rule

Sparenab 9 J.

A simple budgeting rule: 50% for needs, 30% for wants, 20% for saving. Developed by US Senator Elizabeth Warren.

The 50-30-20 rule is one of the simplest and most effective budgeting methods. It divides your net income into three categories:

50% for needs: rent, electricity, groceries, insurance, transport – everything you need to live.

30% for wants: eating out, streaming, clothes, hobbies, holidays – everything that makes life nice but isn't essential.

20% for saving: building an emergency fund, paying off debt, ETF savings plan – securing your future.

Example: with €2,500 net: €1,250 for needs, €750 for wants, €500 for saving. If 50% isn't enough for needs (e.g. because of high rent), adjust the ratios – but try to keep the 20% for saving.

Did you know? The rule comes from the book “All Your Worth” by Elizabeth Warren (2005) – who later became a US senator. She wanted to make financial planning so simple that anyone could use it.

→ Sparquoten-Rechner

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