Struggling to manage your income efficiently? The 70/20/10 rule offers a straightforward system for budgeting that can be implemented by anyone, regardless of income level.
What Is the 70/20/10 Rule?
- 70% of your income goes toward living expenses (rent, food, utilities, transportation, etc.)
- 20% goes to savings and debt repayment
- 10% goes to donations or personal growth (charity, education, self-care)
Why It Works:
- Keeps spending in check
- Encourages consistent saving
- Allows room for generosity or self-investment
How to Apply It:
- Calculate your after-tax income
- Allocate each portion into separate accounts or budget categories
- Automate your savings and debt payments
- Review monthly and adjust percentages if needed
Flexibility Is Key
If your needs differ, tweak the percentages. Some shift to 60/30/10 if saving aggressively, or 80/10/10 during lean months.
The 70/20/10 rule isn’t about restriction—it’s about balance and intention. Adopt it today to simplify your finances and feel more in control.
