One of the greatest obstacles to attaining a healthy financial status is simply getting started with the single most important task: budgeting. After you have done your homework to know where your money is going, the key step to gaining control over your finances is to design a budget. Many people give up before ever getting started because budgeting can feel overwhelming. This simple strategy might be the scaffolding you need to take the first step toward financial control.

If you’re just getting started with budgeting, How to Budget: A Step-by-Step Guide for Beginners breaks down the basics and pairs perfectly with the 50/30/20 rule.

The strategy is simple to remember and has been proven effective regardless of your income. This approach suggests you allocate 50% of your income for basic needs, 30% for discretionary spending, and 20% for savings.

Imagine your finances as a pizza: half is for your dietary needs, three slices for fun, and one for later.

50% for needs

Half of your income should cover your basic needs: rent or mortgage, transportation, groceries, minimum debt payment, education, and health.

For everyday essentials that fall into your 50% needs bucket, using discounted cards for Walmart or Target helps stretch your grocery budget further.

30% for fun

This is the part of the pizza that you can in indulge in. In this part of the budget, you can include all the expenditures you plan to make but do not make up your basic needs. Going out for dinner, buying theater tickets, and selecting an item from your Amazon wishlist are all included in the 30%.

Your 30% category can still be budget-friendly — dining and entertainment are easier to manage with discounted cards for Starbucks or AMC Theatres.

20% for later

A part of your income should go to your savings or debt payment. Instead of eating the whole pizza, you leave a slice or two for later. This percentage is key in taking control of your financial status: you must plan for a rainy day or clear debt that may be holding you back from your goals.

Building the 20% savings habit doesn’t require drastic cuts. Scoring Big on Small Discounts: The Cumulative Savings Effect explains why small, repeatable savings matter.

If sticking to your plan feels difficult, Frugal Living 101: Practical Tips for Saving Money Every Day offers realistic ways to stay within your 50/30/20 framework.