The 50-30-20 Budget: It

Works Even If You’re

No Math Wizard

by Inside Manila Contributor, September 11, 2019 5:33pm

Art by Ahl Mirambel


The 50-30-20 Budget: It Works Even If You’re No Math Wizard

by Inside Manila Contributor, September 11, 2019 5:33pm
Art by Ahl Mirambel

Here's something they never tell you in school: You don’t need to be good at math to be good with money.

Forget all the scary spreadsheets for a moment—it's as simple as remembering the digits 50-30-20. It’s an easy budgeting hack you can do with a pen, paper, and calculator in probably 10-15 minutes. This is the hack a budgeting beginner can follow. Just figure out your starting budget and ask yourself: How shall I allocate my money?

All the math you need to handle your finances are the four fundamentals: addition, subtraction, multiplication, and division. If you know those four, you can very well handle the 50-30-20 budget.

The 50-30-20 budget is a proportional ballpark that helps you align your budget with your values. To rephrase: You’re crafting a budget plan based on 3 life categories. Simply break down your budget: 50% goes to Needs, 30% goes to Wants, 20% goes to Savings.

Now it’s up to you to decide what your starting budget is, what classifies as a need or a want, and where to put in your savings. Simple, right? Here are the steps and some tips.


Start your 50-30-20 Budget from your monthly income (minus tax)

The first step in starting a 50-30-20 budget is, well, having a budget in the first place!

Add up all that you get in a month (salary? allowance?) and deduct tax (if applicable) and that’s your starting budget. Now have your calculator at the ready, kids! It’s time to portion it out.

Allocate 50% to your Needs


How much do you spend on essentials each month? Essentials include healthcare, utilities, bills, school supplies, transportation, groceries, food, and drinks. Note: These are for staying alive not for treating yourself! The total should all fall under 50% of your budget. Gone overboard? See what purchases and payments you can save on or even do without. You can even move some bills down to wants. A debatable example: Is your phone bill really a need or a want?

Limit 30% to your Wants


Limit your wants and non-essential expenses to 30% of your budget. Be smart with your money. Make sure you know the difference between a need and a want! While you’re at it, break up with your bad spending habits. Try being less spendy.

Entertainment subscriptions like Netflix, Spotify, and even mobile data fall under this category. Also, add in debt reduction. This means your blowout budget goes down if you’ve got high-interest debts to pay.

Pro-tip: Stick to your budget! Don’t be too extravagant either. You’ll be all the wiser with a thrifty hand. Plus, it feels good to have savings from this category to roll over into the next month.

Set aside 20% for Savings & Investments


Okay, so what are savings and is this chunky category even necessary? Having savings isn’t just about the money. It’s about your goals. What do you value? And what kind of future do you envision for yourself?

The type of savings accounts you should get will depend on your goals. This 20% can go up as your cash inflow increases, too!

Get a Savings Account (if you haven’t already) for short-term goals. You can deposit money into the bank and withdraw it at your convenience. On the other hand, look into Investments for your medium or long-term goals. You can consider investing in stocks or bonds.

No excuses. Automate your savings and investments with online banking and transactions. Everything’s online, anyway! You can check out COL Financial to get started on a stock investment account. They’ve got free intro seminars, too, if you have no idea what we’re talking about.

Make sure you know the difference between a need and a want


Again, we’re all about a high FQ (financial intelligence quotient). So check yourself before you wreck yourself. If the world was ending, would this thing sustain or be of use to you somehow? If not, move on (unless it fits into your budget).

Additionally, figure out which purchases are just luxuries and conveniences to you. What can you cut down on in terms of utilities or monthly dues? Does your phone bill have to be that high? Find cheaper alternatives to your usual food, drinks, and groceries. Take alternate routes or modes of transportation. Drink water, it’s free!

If you use the 50-30-20 budget correctly, you’ll be able to prioritize your life a lot better. You can pay your bills and reallocate expenses if needed. More importantly, your savings will grow and you’ll still have extra cash to spend on the good things!

Imagine if this budget system were around when you were younger. How much money would you have saved by now? Think of all the things you could have paid for or experienced. Maybe your emergency fund would look a little fuller, or your debts a little less steep. Or you’d have crossed a few more things off your bucket list.

Ask yourself: What do you value in life?

That’s what you’re allocating, saving for, and investing in. It’s not only about the money you’re banking and budgeting, but also the why. That’s the heart and soul of your financial goals. Therefore, be clear about your life goals, envision your future, and your financial goals will follow.

So you see, a high mathematical intelligence does not automatically mean a high FQ. They’re not mutually exclusive. Isn’t that why the 50-30-20 budget is so simple and minimalist in the first place? And it’s not an inflexible proportion either. The percentage can go up and down depending on your priorities!

At the end of the day, budgeting and one’s financial intelligence quotient (FQ) are about values, not numbers. So cheers to high FQ!

Written by: Belle O. Mapa of; See original article here. is your go-to student portal for making smarter decisions about education to employment. For more information, visit and  

*Edits have been made by Inside Manila Editors


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