“Its simplicity is its strength. Unlike complex budgeting methods that require detailed tracking of every expense category, this rule provides flexibility and is easy for most people to understand and implement,” says Colton.

It’s digestible, much like the 80-20 rule for nutrition advises balancing healthy and indulgent eating. Eighty percent of the food you eat is healthy and 20% are your favorites that may not be as nutritious. The 50-30-20 budget method strikes a balance between financial essentials and discretionary spending. Both aim for a healthier, more balanced lifestyle – one for your body, the other for your wallet.

Unlike other budgeting strategies that might make you feel like you’re trading financial responsibility for self-care, with this method 30% of your income is for things that bring joy, relaxation, and fulfillment to your life, says Williams. 

“This allowance for indulgence doesn’t undermine your financial goals; it strengthens them. It acknowledges that life isn’t just about hoarding money but also about living it to the fullest,” he adds.

By sticking to the formula, you’ll accomplish several goals, says Williams. Firstly, you prioritize your financial objectives, whether it’s building an emergency fund, paying off debts, or saving for your dream vacation. “This prioritization ensures that your hard-earned money goes where it matters most,” he says.

Secondly, this method acts as a shield against overspending. “In the age of treating yourself, it’s all too easy to splurge on non-essentials and lose sight of your financial health. This method instills discipline, guiding you to make informed decisions,” says Williams.