What Is the 50-30-20 Rule?
The 50-30-20 rule is a simple budget formula: you divide your monthly net income into three pots – 50 percent for necessities (rent, groceries, insurance), 30 percent for wants (leisure, travel, shopping) and 20 percent for saving and retirement provision.
Its strength: you don't need a household ledger, just three accounts and a standing order – you save right after your salary arrives. In expensive German cities you may adapt the ratios (e.g. 60-25-15); what matters is that the savings pot never goes empty. A worked example, criticism and implementation tips are in the detailed guide The 50-30-20 Rule.