Managing money seems harder than ever these days. Many people are struggling financially, whether it's trying to put money away into a savings account or budgeting against increasing prices, it all just seems so difficult.  
However finding a budgeting structure that works for you allows you to take control of your finances, track your spending habits, and make better financial decisions that will benefit your present and future self. 

According to financial experts, with the newly popularised 50:30:20 rule, budgeting can be made easier with room to have fun, pay the bills, and save for the future.  
Whatever your finances look like, budgeting is the key to keeping things on track and under control. Unlike other budgeting methods, this rule doesn’t limit your spending or tell you specifically what you can or cannot spend money on but, this is a spending guide categorised by your wants, needs, and savings.

Having a clear and simple guide can help you meet your financial goals, track spending habits, and make smarter money moves.  

What is the 50:30:20 Rule? 

This technique was popularised by Senator Elizabeth Warren and her daughter, Amelia Warren Tyagi in their book,
“All Your Worth: The Ultimate Lifetime Money Plan.”  
The 50:30:20 rule makes budgeting easier by dividing your monthly income (after tax) into three categories, 50% for NEEDS, 30% for WANTS, and 20% for SAVINGS. 

Why it Works 

The simplicity of this method is what makes it so great. Each spending category is clear, so you know exactly how much of your income to put aside each month. This structure helps you to pay important financial commitments whilst also allowing some room for realistic treats and splurging.  

One of the reasons we may struggle with budgeting is because there is no room to enjoy the money that we have worked hard for. Such constrictions can cause impulse buys and shopping sprees which then results in overspending and the budgeting plan falling apart.  

When you have space to pay for what you need and also what you want, budgeting becomes easier – and you can still have a little fun after working so hard.

Make it Work For You 

1. What is your monthly income? 

   The first thing you need to do is look at your monthly income - What do you expect to make every month after business expenses or government tax?  

2. Categorise your spending  

   Use your bank statement from the last month to categorise your spending into needs, wants, and savings. Be honest and ask yourself whether something is crucial for your monthly living or if you could do it without spending so much money in specific areas of your life. It can be difficult but, distinguishing between what you really need vs what you want will make the biggest difference.   
   For example:  
   Instead of dining out or ordering takeaways think about adding a few extras to your grocery list and cooking at home. You can have a girl’s night in, a romantic dinner date, or just a delicious meal from home without spending extra money.  Whether you want a pizza or a burger, a salad or some pasta, it can all be enjoyed with the groceries you have at home.  

3. Do what works for you 

   After reviewing your spending habits, compare it against the 50:30:20 method to see if there are areas where you have been overspending and where you can adjust your spending to fit your new budget. There may be some areas where you will need to cut back spending (this is probably in the wants category) but take into account your monthly income and financial goals.  
   It's important to note that some months may have to be budgeted differently. For example, you might have an important event that you need to attend, a special occasion, extra costs at work or there are student loans and debts that need to be paid off. Take this into account each month and adjust accordingly. Your needs might need to go up to 60%, wants might have to go down to 20% rather than 30% and savings could even go down to 10% to fit your financial situation.
   You might need to shop for luxuries at certain times of the year when they are on sale, start thrift shopping to save money or cut back on going out for coffee every morning and take time to make it at home. Little lifestyle changes like this can have a huge positive impact on your financial goals and habits.  

4. Take the time to track  
   Whether you want to write it down in your planner or make a spreadsheet, it’s important to know how much you spend and keep a record of it.  
   Spending habits can be hard to break, especially in a world where social media promotes spending and overconsumption. If you find it difficult to control your spending, then financial experts recommend putting money into a separate account for monthly bills and expenses and then another account for fun and luxuries. 

Regardless of your income, it is important to have control over your finances and make financial decisions that benefit you. Budgeting is a crucial skill for women trying to achieve financial independence and stability. Using the 50:30:20 method can help you to become THAT GIRL that makes money moves to benefit your current and future self.