What is the 50/30/20 budgeting rule?

The 50/30/20 rule divides your after-tax income into three categories: 50% for needs (rent, groceries, utilities, minimum debt payments), 30% for wants (dining out, subscriptions, entertainment), and 20% for savings and extra debt repayment. It is a simple starting framework for budgeting. Adjust the percentages based on your situation — high cost-of-living areas may require more than 50% for needs.