I Tried the 50/30/20 Rule – Here’s What Happened?

For years, I found myself wrestling with the concept of budgeting. I meticulously crafted spreadsheets, explored various budgeting apps, and even embarked on ambitious “no-spend challenges” that fizzled out after just a week. Despite my best efforts, nothing seemed to take hold. Then, one fateful day, I stumbled upon the 50/30/20 rule—a straightforward yet remarkably effective strategy for navigating the complexities of personal finance. Intrigued by its simplicity, I resolved to give it a shot, and what unfolded was not just unexpected but truly transformative.

What Exactly Is the 50/30/20 Rule?

The 50/30/20 budgeting rule is a financial guideline that divides your after-tax income into three categories:

• 50% for Needs: Rent, bills, groceries, insurance, and essentials.
• 30% for Wants: Eating out, entertainment, shopping, and lifestyle expenses.
• 20% for Savings and Debt Repayment: Emergency funds, investments, loan repayments, and retirement contributions.

On paper, it looks simple. But I wondered: could I stick to it in real life?

My Starting Point

Before I began, my money was all over the place. Some months I saved a little, other months I overspent. I had no real structure. That’s when I thought—why not test the 50/30/20 method for at least three months and track my results?

After committing to the 50/30/20 method, I quickly realised the impact of having a clear financial framework. The clarity it provided helped me categorise my expenses into needs, wants, and savings with ease. I began to see patterns in my spending habits, allowing me to identify areas where I could cut back and save more. By sticking to this structured plan, I not only improved my budgeting skills but also felt a sense of control over my finances that I had previously lacked. This newfound discipline motivated me to stay accountable and make more intentional choices with each paycheck, ultimately leading to a healthier financial future.

Here’s what my average monthly income breakdown looked like when I started:

• Needs: about 65% (higher than recommended)
• Wants: about 25%
• Savings/Debt: only 10%

Clearly, I was spending too much on essentials and not saving enough. Time to change that.

Month 1 – The Wake-Up Call

The first month was tough. I realised how much of my “needs” weren’t needs. For example, I had multiple subscriptions (music, streaming, and apps) that I hardly used. Cutting them saved me around 3,000 KSH instantly. I also switched to a more affordable internet plan and began cooking more at home instead of eating out. This small shift already helped me move closer to the 50% category for needs.

Here I also wrote down everything I spent. This exercise was eye-opening because it highlighted little purchases that added up quickly. I learned that discipline is the heart of financial freedom. (Related: How I Stay Productive as a Freelancer)

Another significant change was reevaluating my budgeting strategy. I started setting specific spending limits for different categories, which forced me to be more mindful of each purchase. For instance, I allocated a fixed amount for groceries and entertainment, ensuring I didn't overspend in any area. This newfound structure not only kept my finances in check but also encouraged me to find creative, low-cost alternatives for entertainment, like hosting game nights with friends instead of going out. By taking control of my money and being intentional about my choices, I felt empowered and more confident in my financial journey.

Month 2 – Finding Balance

By the second month, everything began to feel more manageable and harmonious. I had taken a good look at my spending habits and made some thoughtful adjustments to ensure that my “wants” didn’t encroach upon my savings. Instead of completely eliminating the little pleasures that brought me joy, I set aside a specific budget for my fun money—a modest allocation that allowed me to indulge while keeping my financial goals in sight. This intentional approach meant I could still enjoy coffee dates with friends and treat myself to occasional delights, all while being mindful of my choices and their impact on my overall financial health. I relished the balance of enjoying life’s small luxuries without feeling deprived or guilty, and it made the journey all the more rewarding.

What shocked me most was how quickly my savings began to grow. I managed to set aside 15% instead of 10%, aiming for the full 20% in the next month. This encouraged me to think about long-term financial goals like investing and building an emergency fund. (Related: Saving vs. Investing – Which One Matters More?)

As I continued on this path, I realised that my newfound financial discipline was not just about cutting back; it was about redefining my priorities. Allocating a specific budget for leisure allowed me to enjoy life without guilt, fostering a healthier relationship with money. With each passing week, the sense of empowerment grew, transforming my perspective on budgeting from a restrictive practice to a proactive strategy for achieving my dreams. I began exploring investment opportunities and actively engaged in learning about personal finance, realising that this journey was about crafting a sustainable lifestyle, where every dollar spent was intentional and every saving was a step closer to financial freedom.

Month 3 – The Breakthrough

By month three, I was fully adapted to the rule. My “needs” finally went down to 50%, my “wants” stabilised at 30%, and I hit 20% savings consistently. The biggest lesson? It wasn’t about restricting myself—it was about awareness and balance. I no longer felt guilty when spending on something fun, because I knew I had already saved responsibly.

I even began exploring side hustles to boost my income, making the 20% savings even more powerful. It felt like I had taken back control of my finances. (Related: 5 Uncommon Online Jobs You Can Start Today)

The Challenges I Faced

Of course, it wasn’t all smooth sailing. Here are some struggles I encountered:

• High living costs: Living in an urban environment often meant that essential expenses like rent and public transportation could consume more than 50% of my monthly income. This left little room for savings or discretionary spending, making financial planning a constant challenge.
• Unexpected expenses: Life is unpredictable, and I often faced emergencies—such as medical bills or urgent home repairs—that significantly strained my budget. These unforeseen costs not only disrupted my financial goals but also temporarily depleted my savings, emphasising the need for an emergency fund.
• Self-control: One of the toughest hurdles to overcome was resisting the temptation of impulse purchases. Sales promotions and online offers were frequent distractions that made it difficult to stick to my budget, requiring a significant amount of willpower to avoid unnecessary spending and prioritise my financial health.

What I Learned From the 50/30/20 Rule

Here are the biggest lessons from my experience:

1. Simplicity wins: Unlike complicated spreadsheets, this method was easy to follow.
2. Awareness is key: Tracking every expense made me more mindful of how I spend.
3. Small changes add up: Canceling unused subscriptions and cutting small luxuries saved thousands.
4. Flexibility matters: Sometimes, I had to adjust percentages slightly depending on my income and expenses.

Ultimately, the 50/30/20 rule gave me structure without feeling restrictive. It became a money habit I could maintain.

Should You Try the 50/30/20 Rule?

If you’re struggling with money management, I highly recommend giving this simple yet effective rule a try. It’s suitable for everyone—from freelancers and students to working professionals—providing a clear and easy-to-follow roadmap for budgeting. What’s truly great about this approach is that it requires no advanced financial knowledge, making it accessible to anyone eager to take control of their finances. With this framework, you can streamline your spending, save for future goals, and ultimately gain a greater sense of financial security.

Final Thoughts

When I first encountered the 50/30/20 rule, I initially dismissed it as “too simple to be true.” However, after diligently adhering to it for three transformative months, I can confidently assert that it has completely reshaped my relationship with money. This straightforward budgeting method has empowered me to take control of my finances, alleviating the stress that often accompanied my previous spending habits. I now approach my financial future with a sense of preparedness and optimism, knowing I have a clear plan in place that accommodates my needs, wants, and savings goals. For more insights on effective financial management, check out [this resource]. (Related: Top 5 Mistakes I Made as a Beginner Freelancer)

So, if you’re tired of complicated budgets, give the 50/30/20 rule a try—you might be as surprised as I was!

Have you tried the 50/30/20 rule before? Share your experience in the comments below—I’d love to hear how it worked for you!