How much should I save each month?

The 50/30/20 rule suggests 20% of take-home pay. On $5,000/month that is $1,000/month or $12,000/year.

Budget Planner (50/30/20 Rule)

The 50/30/20 rule allocates 50% of take-home pay to needs, 30% to wants, and 20% to savings and investments.

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Monthly take-home ($)

Pay frequency

50% Needs

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rent, food, transport

30% Wants

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dining, fun, hobbies

20% Savings

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investments, emergency

Annual savings

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10-yr pot (6% growth)

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Daily budget

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What is the 50/30/20 budget rule?

Allocate 50% of after-tax income to needs (rent, food, bills), 30% to wants (dining, entertainment), and 20% to savings and debt repayment.

Does 50/30/20 still work with high inflation?

In high-cost cities, needs often exceed 50%. Many adapt it to 60/20/20 while still prioritising the 20% savings goal.

What are sinking funds?

Sinking funds are savings set aside for known future expenses like car repairs or holidays. They come from the 20% savings allocation.