What is the 50-30-20 budget rule?
It can help you decide if you’re happy with where your money’s going and see where you could make some positive changes. This approach is a great place to start if you want to budget better or improve your finances.
In this article we will cover:
This guide explains how to work out your own percentages and use budgeting tools to make small changes that can help you feel more in control of your money.
What is the 50-30-20 rule?
The idea of the 50-30-20 rule is to split your money into 3 groups.
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50% for your needs: these are important costs, such as your rent or mortgage, bills, food, and transport to work
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30% for your wants: this is for fun things, such as eating out, shopping, trips and subscriptions
Budget planner
Our budget planning tool can help you break down your spending into different categories to see where you can make changes.
So, if your monthly income was £1,500 after tax, you might spend:
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£750 on needs
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£450 on wants
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£300 on savings or debts
Remember, everyone’s situation is different. If your spending doesn’t fit the 50-30-20 rule, that’s okay. But, if it’s realistic for you, it could give you a good goal to aim for.
Small changes can make a big difference over time. Putting more of your income into savings or paying off debt can help you feel in control and able to make more of your money.
Explore: 9 steps to financial fitness
How to apply the rule
Applying the rule takes just a few steps:
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Calculate your income: look at how much money you have coming in regularly. This will mainly be your income. If your income changes from month to month, work out the average over the last three months.
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Review your spending: check your bank statements for the last three months to work out your average monthly spend.
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Categorise your expenses: group your spending into needs, wants, and savings or debt. This helps you see the areas where you might be overspending.
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Work out your percentages: divide the amount you spend on needs per month by your monthly income. For example, £750 divided by £1,500 equals 0.5.
Multiply that number by 100 to get your percentage, which, in this example, is 50%. Repeat this for your wants and savings.
Once you’ve worked out the percentages, look at how they compare to the rule. If you want to save more or repay debts faster, you may be able to make some small adjustments.
If an unexpected expense knocks you off track one month, don’t worry. Just try to get back on track the following month. It can be helpful to have a safety net to cover unexpected costs.
Explore: How to build an emergency fund
Mobile Money trends
The HSBC UK Mobile Banking app has a range of tools to help you manage your money. These include spending insights and monthly budgets. Just log on, tap the menu icon in the top right corner, tap the 'Money trends' tile and choose the option you’re interested in.
Explore: Mobile money management
Book a financial health check
You can book an appointment with one of our financial fitness trainers, who can take you through a 30-minute financial health check. Our trainers are on hand to speak to you about your banking needs. You don’t have to be an HSBC customer.
They won’t give financial advice. They’re here to help you achieve your financial goals, whatever they may be. They’ll be able to explain where you’re doing well and where you may be able to improve, focusing on what’s important to you.
This article was last updated: 26/06/2026, 05:09
