# Check your spending against the 50/30/20 rule

> Half on needs, 30% on wants, 20% to savings. What the 50/30/20 rule counts, where it breaks, and how to check last month against it in one question.

Canonical: https://memtomo.com/guides/50-30-20-budget-rule/

The 50/30/20 rule splits take-home pay into three buckets: 50% for needs, 30% for wants and 20% for savings and paying down debt. Elizabeth Warren and Amelia Warren Tyagi popularised it in their 2005 book *All Your Worth*.

## Why it works

- **Three numbers, not thirty categories.** A detailed budget gets abandoned the first month life refuses to fit its lines. Three buckets survive.
- **It is a check, not a plan.** You don't plan every purchase in advance. Once a month you see whether the shares are near 50/30/20 and adjust the one that drifted.
- **Saving is a share.** Put the 20% first and it grows with your income instead of being whatever is left.

## Where it falls short

In expensive cities rent alone can pass 40% of take-home pay, so needs at 60% may be the honest baseline. Then the rule is a direction, not a pass or fail: watch the trend and move the shares a point at a time.

## Doing it in Memtomo

The data is already in your bank. Upload the export, tell the assistant once which categories are needs, and "how did last month split?" takes one message. The table keeps every month you add, so you can compare them.