Reach your financial goals quickly by using the 60 30 10 rule budget! Find out what that is and how it works.
Have you heard of the 60 30 10 rule budget?
If you want to get a jump-start on your savings or on paying off debt, you might want to try this budgeting method.
This budget method is simple, but not necessarily easy for everyone.
If you are currently struggling by living paycheck to paycheck, you might first want to start by learning how to get a month ahead on your bills or figuring out why you can’t save money.
However, if you are determined and frugal, this budgeting method can help you crush your financial goals fast!
So, what exactly is the 60 30 10 rule budget?
(This post contains some affiliate links for your convenience which means if you make a purchase after clicking a link I will earn a small commission at no extra cost to you. Click here to read my full disclosure policy.)

What is the 60 30 10 Rule Budget?
This percentage-based budgeting method focuses on dividing your income into 3 categories.
Here are the categories and percentages:
60% – Savings
First, the majority (60%) of your income will go directly into savings (or to pay off debt).
30% – Needs
The next portion of your income (30%) will be dedicated to all of your basic needs – anything you absolutely need to pay or can’t live without (like food and shelter).
10% – Wants
Finally, 10% of your budget will go to wants or anything that you enjoy, but that is non-essential.
Why Should You Budget by Percentages?
Using percentages can really simplify budgeting and make it easier for those who do not like to budget.
Other methods, like zero-based budgeting for example, require you to make sure every single dollar has a job and to keep track of where each dollar goes. This means you might have 10-15 different categories for spending and saving.
The 60 30 10 budget only requires you to divide your income into 3 easy-to-remember categories.
Is the 60 30 10 Rule Budget Right for You?
The 60 30 10 budget will not be a good fit for everyone. Here are the pros and cons to this budget:
The Pros of the 60 30 10 Rule Budget
The 60 30 10 rule budget is great for people who want to:
Reach Financial Goals Quickly
Anyone who is looking to aggressively save money (or pay off debt) will greatly benefit from this budget.
Following this budget can help you can reach your goals faster.
Limit Spending
If you are looking for accountability and want to limit spending, the 60 30 10 budget will help you cut out unnecessary spending and focus on your needs.
Practice Self-Discipline
The key to make anything successful (whether a new exercise program or a new budget) is self-discipline. If you are determined and work hard, this budget can help you build self-discipline.
Increase their Income
Focusing on saving as much as you can will inspire you to find ways to increase your income (and up your savings!).
Prepare for Emergencies
Nothing helps more in an emergency situation then having a large emergency fund ready. Stock up your savings and fill up your emergency fund.
Related:
How Much Money Should You Have Left After Bills?
Why Can’t I Save Money? (Plus 6 Solutions!)
How to Get a Month Ahead on your Bills
The Cons of the 60 30 10 Rule Budget
Here are the major cons of the 60 30 10 rule budget:
Difficult
This budgeting method is very difficult, especially if you are used to spending a lot of money on wants and you don’t want to cut back.
This budget may require you to make a lot of changes to your spending habits.
Cost of Living
If you live in a very high cost of living area and pay a lot for rent or mortgage, it might be very difficult for you to keep your spending on basic needs to 30% of your income.
Low Income
If you have a very low income or are living paycheck to paycheck, this budget might be very challenging or impossible for you to follow.
Related:
Cheap Ways to Live
How to Get Ahead Financially when You Are Behind

How to Use the 60 30 10 Rule Budget to Manage Your Money
If you have read this far, I bet you are ready to dive into the 60 30 10 budget challenge and start saving a lot of money. Here’s what you need to do to get started:
1. Add Up Your Monthly Take-Home Income
Standard employees (on a W2) will just write down the amount earned after taxes (this is your take-home pay).
If you are self-employed, a contractor, or have multiple jobs, you might find this step more challenging as you will need to determine your income after taxes. If necessary, connect with a tax professional for assistance.
2. Set Aside 60% Into Your Savings (or Financial Goals)
After figuring out your take-home income, 60% will go towards your financial goal. Remember, everyone will have a different financial goal and when you reach one goal, you might want to set a new financial goal and continue using this budgeting method.
Some great ideas for financial goals to get you started:
- Building up savings
- Starting an emergency fund
- Paying off debt
- Donations to charity
- Starting a business
- College fund for your kids
- Downpayment for buying a house
- Investing in stocks or real estate
- Retirement (IRA, 401K, etc.)
3. Use 30% For Your Needs
Next, figure out how much you can spend on your needs and if this amount will cover your basic monthly expenses.
Basic needs include:
- Housing (rent/mortgage)
- Food
- Utilities
- Transportation to work
- Health care needs (insurance, medicine, doctor visits, etc.)
- Monthly debt payments
You might need to cut costs and live a frugal lifestyle to fit all of your needs into this category.
4. Spend 10% on Wants
When budgeting, I’ve found that it is important to set aside some funds each month for wants.
Otherwise, budgeting can feel horrible and could lead to resentment. You want to stick with budgeting so be sure to incorporate some “fun money” into your budget with this method.
However, this might be the hardest part of the 60 30 10 budget – limiting your spending to only 10% of your income.
Remember, wants are things that you do not need to survive:
- Trips to the movies
- Buying new outfits
- Eating out in a restaurant
You can still have lots of fun and not spend any money!
5. Adjust Spending As Needed
It’s a good idea to review this budget at least monthly, but especially if something changes in your finances. You can make adjustments as necessary.
What does this look like in real life?
To follow these percentages, you need to know your take-home pay:
- Take-home pay x 0.60 = savings/investing amount (or amount towards debt-payoff)
- Take-home pay x 0.30 = needs
- Take-home pay x 0.10 = wants
For example, if you take home $4000 a month, you would allocate your funds like this:
- $4,000 x 0.60 = $2,400 – savings
- $4,000 x 0.30 = $1,200 – needs
- $4000 x 0.10 = $400 – wants
Following this plan with that income, in 12-months you would save $28,800!!
Related:
How to Save $10,000 in One Year
52-Week Money Saving Challenge Printable

Can I Do the 60 30 10 Rule Budget?
If you are struggling to make ends meet or are living on a low income, this budget might be too difficult for you at this time.
Start by finding ways to increase your income and cut costs. You can always come back to try this budget a little later!
Jump Start Your Savings with the 60 30 10 Rule
The 60 30 10 rule is great for people who are determined to save as much as possible as quickly as they can! If you are ready and determined, you can reach your financial goals fast!
What do you think? Are you going to try the 60 30 10 budget?