What is the 70/20/10 rule?

The 70/20/10 rule is a guideline that balances spending, saving, and debt repayment. It's a simple method to get started managing money but should be adjusted to fit your needs. One of the limitations of the 70/20/10 rule is that it doesn't separate essential and nonessential expenses. Budgeting is a great way to gain control over your income.

What is the 70/20/10 budget rule?

The 70/20/10 budget rule is a money management strategy you can use to dictate where you want your income to go. It involves separating your take-home pay into three buckets and dividing each into the following percentages: Seventy percent for monthly bills and daily spending.

Is a 70/20/10 budget a good idea?

“Saving and investing 20% of your pay will put you well on your way toward building wealth and having the retirement you want.” For many, the 70/20/10 budget is a sensible plan because it guarantees money will be available for spending and reaching goals. You can modify the plan, however, to reflect your personal circumstances.