The 50/30/20 rule allocates income as: 50% needs (rent, groceries, utilities, transportation), 30% wants (dining out, entertainment, subscriptions), and 20% savings. Students may adjust to 55/25/20 since housing costs are often higher relative to income.
- 50% Needs: rent, utilities, groceries, transportation, insurance
- 30% Wants: dining out, entertainment, personal care, subscriptions
- 20% Savings: emergency fund, debt payoff, future goals
- Student adjustment: 55-60% needs is common due to housing costs
- Even $50/month savings builds a $600/year emergency fund
| Category | Standard Rule | Student Adjusted | On $2,000/mo |
|---|---|---|---|
| Needs | 50% | 55% | $1,000-1,100 |
| Wants | 30% | 25% | $500-600 |
| Savings | 20% | 20% | $400 |