#WaysToSave – Part 1 –
The 50/30/20 rule

#WaysToSave – Part 1 –
The 50/30/20 rule

Within this blog post series we’ll look to share some of the well publicised saving strategies that you can use to save money. First up, the 50:30:20 rule.

Devised by Senator Elizabeth Warren in her book All Your Worth: The Ultimate Lifetime Money Plan, the 50:30:20 rule provides three simple rules for managing your income (if you self employed…that’s after tax).

The first job is to define a budget looking at what comes in and out each and every month. Whilst Quo Money does this automatically for you by looking at your open banking data, a pen and paper or a trusty spreadsheet will do.


The first rule relates to spending 50% on needs.

Needs relate to the absolute essential payments that you need to make each month to survive. The key word here is survival, and this relates to payments such as mortgage payments or rent, utilities, council tax and any debt repayments that you are contractually committed etc.

Regular payments that you have for Sky Sports, Spotify, Netflix etc don’t apply here, promise me you can survive without them 😂.

If you are finding that your needs are less than 50%, great job! Maybe consider saving a little more for that rainy day or something you really want.

If you are finding that your needs are greater than 50%, maybe its time to make some changes to bring your needs in line with your income.


The second rule relates to spending 30% on wants. This relates to things that you simply want but aren’t essential to survival. Here I’m talking about holidays, clothes, eating out, tech products etc.

This isn’t saying don’t have fun and make life entertaining, we all like (and deserve) luxuries in live, but is about living within your means.


Lastly, this strategy suggest that you put 20% of your savings into either savings or investments. Ideally you should have in place at least a 3 month buffer in the event that you lose your job or the unforeseen happens. Once you’ve met this basic standard, time to think about the future.

If you are looking simple to save, a Cash ISA is a great place to start and there are lots of places where you can get one from. If you’re looking for something for adventurous you could look to get a Stocks & Shares ISA and invest your savings. Be aware though, the value of your investment can do up and down.

In Practice

If you feel like the 50:30:20 rule is the way to go, why not start by creating three bank accounts – one for needs, one for wants and one for savings?

Then, which ever account your salary comes into (subject to it being fixed) set up standing orders to transfer it to the three accounts using the 50:30:20 rule on payday.

Just a personal note, don’t feel like you have to live religiously by these rules, spending your budget for needs and wants each and every month. It might be that you’re 50:30:20 is actually more like 40:20:40 or 60:20:20 as everyones different – use it as a basic principle and adapt overtime based on your unique position.

If you’ve used or are using this strategy we’d love to hear from you – email us at social-media@quo.money – we’d love to hear from you.