50/30/20 budget rule

Needs are the bills you can't skip: housing, utilities, groceries, insurance, transportation, and minimum debt payments. Wants are everything optional, from dining out to subscriptions. The last 20% goes to savings and to paying debt down faster than the minimums.

The rule works on take-home pay, not gross salary, because taxes and payroll deductions are already gone. It's a starting point rather than a law: in high-cost areas needs often run above half of pay, and the fix is usually trimming wants before savings.