If the thought of budgeting feels overwhelming, you’re in good company. Luckily, not all budgeting methods involve complicated spreadsheets and equations. The 50/30/20 budgeting method is refreshingly simple and straightforward! In this post, I’ll not only introduce you to the 50/30/20 method but also offer you an invaluable resource—a FREE 50/30/20 budget template spreadsheet! You’ll learn how to download the spreadsheet, utilize it effectively and even customize it to your unique financial situation.
What Is the 50/30/20 Budget Rule?
The 50/30/20 rule is a widely recognized budgeting method developed by U.S Senator, Elizabeth Warren, in the early 2000s. This rule divides your take-home income into three categories: needs, wants, and savings/debt repayment.
50% of your income goes to your needs, 30% to your wants and 20% to savings/debt repayment.
Pretty simple right? That’s because unlike other complex budgeting frameworks, the 50/30/20 rule is designed for the everyday person who wants to achieve financial stability without wading through complicated equations and spreadsheets.
Let’s break down what the needs, wants, and savings/debt repayment categories are in the 50/30/20 budget.
Needs (50%)
Needs are your monthly essentials – think rent or mortgage payments, utility bills, groceries, transportation costs, and minimum debt payments. These are the expenses that keep the lights on and the fridge stocked.
Wants (30%)
Wants are the fun part of your budget – think movie nights, streaming subscriptions, hobbies, and concert tickets. These are the expenses that allow you to enjoy life beyond the basics.
Savings/Debt Repayment (20%)
The savings and debt repayment category is your financial safety net. It includes contributions to savings accounts, retirement funds like your trusty 401(k) or IRA, emergency funds and the extra cash you can put towards your debt to pay it down quicker.
Keep in mind that any expenses that are automatically deducted from your paycheck shouldn’t be added to this category. For instance, if your 401(K) savings are automatically deducted from your paycheck, you wouldn’t include it here.
Keep in mind that any expenses that are automatically deducted from your paycheck shouldn’t be added to this category. For instance, if your 401(K) savings are automatically deducted from your paycheck, you wouldn’t include it here.
Download the 50/30/20 Budget Template
Now for the fun part!
What’s the best way to get started with budgeting using the 50/30/20 method? Downloading a 50/30/20 budget template spreadsheet!
When I first started budgeting I scoured the internet for a 50/30/20 budget template that fit my needs. I wanted it to be simple enough so that I actually wanted to use it, but still effective. Unfortunately, all the spreadsheets I found were either too complicated or way too basic. So, I created my own.
I built the spreadsheet on Google Sheets since I figured most people have a Gmail account. However if you’re a Microsoft Outlook user, you can download a Microsoft Excel sheet to use instead (details to come!) You can also download a PDF version if you’re not a fan of spreadsheets.
With the Barefoot Minimalists 50/30/20 budget you can calculate your 50%, 30%, and 20% figures, set a goal budget and compare that budget with the 50/30/20 calculations as well as your actual spending. Some of the figures need to be added manually, but some are automatically populated. The spreadsheet is also totally customizable! I’ll get into all the ways you can customize your spreadsheet in the section below. For now, download the spreadsheet here.
Click here to discover 100+ Budget Categories and Subcategories to Include in Your Personal Budget!
How to Use the Barefoot Minimalists 50/30/20 Budget Template
Using the spreadsheet is simple! The most important thing to keep in mind is that you cannot edit the public version of the spreadsheet.
In order to make edits to the spreadsheet you’ll need to first make a copy.
To do so click file>make a copy. If you want to download a Microsoft Excel sheet or PDF version of the spreadsheet click file>hover over download>click the option you’d like. Rename your spreadsheet and it’ll be ready to use!
If the ‘make a copy’ button is not clickable, this is because you are not logged into your gmail account. Log into your gmail account and you should be able to make a copy.
After you have an editable version, follow the steps below to start budgeting!
- Take a look at the Example 50/30/20 Budget. There are two tabs on the spreadsheet. The second tab is a 50/30/20 budget example for someone making $4100 a month.
- Fill out 50/30/20 Calculations Section. Enter ONLY line 28 (Total Take-Home Income). The rest of the numbers will populate automatically.
- Enter Budgeted Amounts in ‘Your Spending’ Section. Enter your budgeted amounts for needs, wants and savings. This is what you want your spending to be in each category. After you enter these numbers you can compare them to your 50/30/20 calculations.
- Enter Actual Spent Amounts in ‘Your Spending’ Section. At the end of the month, enter in the actual amount you spent on each expense. Compare this number to the budgeted amount.
- Add Notes/Observations. After you’ve added your actual and budgeted amounts, make some observations about your spending. Take note of any areas where you can cut back. Drop these notes in the notes/observations sections.
That’s it! I recommend making multiple copies of the same sheet for different months. Rename them to keep yourself organized.
What if My Expenses Don’t Fit Neatly Into the 50/30/20 Categories?
Everyone’s financial situation is different – which is why filling out a budget spreadsheet can sometimes feel like trying to fit a square peg into a round hole.
If you’re struggling to fit your expenses neatly into the 50/30/20 categories, you’re not alone. In fact, many financial experts argue that the 50/30/20 rule is unrealistic for most Americans in 2023.
So what do you do?
First, you’ll want to make sure that there is absolutely no way for you to make the 50/30/20 rule work. Keep in mind that even expenses that seem fixed, like your grocery bill or rent, may be brought down with the right money saving strategies.
If after trying to cut back on your spending you still aren’t able to fit your expenses within the 50/30/20 framework, you’ll want to update the budget template to fit your unique financial situation. To do so, you’ll want to adjust the percentages. You may also find that the budget template is missing some key expense categories. Fortunately, you can easily add or delete categories within the spreadsheet!
Here’s how.
1. Adjust the Percentages
While the 50/30/20 rule suggests allocating 50% of your income to needs, 30% to wants, and 20% to savings, this breakdown may not work for you. The reason? It may not be taking into account your personal values and priorities.
For example – let’s say that you work from home so renting a larger apartment is super important to you. You’re willing to eat out and shop less in order to afford a more spacious living arrangement. This means that you’re most likely going to spend more than just 50% of your income on your “needs”. As a result, you may have to spend less on your “wants” – like 20% of your total income instead of 30%.
Technically speaking this means that you’re no longer following the 50/30/20 rule. But you can still use the 50/30/20 budget template I created! You’ll just need to adjust the percentages in the spreadsheet to fit your needs.
How to Adjust Percentages in the Barefoot Minimalists 50/30/20 Budget Template
Below are the steps to take to adjust your percentages in the Barefoot Minimalists 50/30/20 Budget template.
1. Adjust text
In Step 1: 50/30/20 Calculations, you’ll want to change the text for lines 30-32 based on your percentages. For instance, instead of ‘Needs: 50% of your income’, you may want it to say ‘Needs: 60% of your income’. Adjust the “wants” and “savings” categories accordingly so that the percentages equal 100%.
2. Adjust percentages
Next, you’ll want to adjust the percentages. To do so, click the $0 box for the percentage you’d like to change.
Next you’ll want to adjust the equation. Let’s say you want your “needs” to account for 60% of your income instead of 50%. You’ll want to change the blue number from 0.5 to 0.6. 30% would be 0.3, 40% would be 0.4 and so on.
Repeat these steps to change each equation.
2. Add/Delete Categories
You may also find that you have expenses that haven’t been included in the needs or wants category. If this is the case, you’ll want to create additional categories. For instance, you might need a category for mandatory support payments like alimony or child support in the “needs” section.
How to Add/Delete Categories in the Barefoot Minimalists 50/30/20 Budget Template
Below are the steps to add/delete categories in the Barefoot Minimalists 50/30/20 Budget template.
1. Click into an expense
Let’s say you want to either add an expense above ‘Cell phone and Internet’, or you want to delete that expense. The first thing you’ll want to do is right click that line.
IMPORTANT: If you want to add a category, DO NOT add it above ‘Housing expenses’. If you do, that expense won’t be included in the total amounts spent. Basically, right click any expense except for Line 40.
2. Click ‘Insert 1 row above’ or ‘delete row’
If you want to insert an expense, click ‘Insert 1 row above’. If you want to delete an expense, click ‘Delete row’.
Let’s say you’re adding an expense, once a new row is created you’ll simply want to type out the expense you wish to add. From there, just add the budgeted and actual amounts spent for that expense. Your category will be included in the formula automatically.
Start Budgeting!
So there you have it! I hope that you love using this 50/30/20 budget template as much as I do. If you have any questions about how to download or customize the sheet, let me know in the comments below.
Good luck on your budgeting journey!
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