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A budget is just a plan for where your money goes before it goes there — here's a simple, proven framework to build one.

The 50/30/20 starting framework

• 50% needs: rent/bond, groceries, transport, insurance, debt minimums — the things you can't skip.
• 30% wants: eating out, entertainment, subscriptions, upgrades.
• 20% savings and extra debt repayment: emergency fund, retirement, tax-free savings, or paying down debt faster than the minimum.

Treat these percentages as a starting point, not a rule — if your rent alone eats 40% of your income, your "needs" bucket will naturally be bigger, and that's fine; the framework is about seeing the split clearly, not hitting exact numbers.

How to actually build yours

1. List your actual take-home income (after tax) for the month.
2. List every fixed expense — the ones that don't change month to month.
3. Estimate your variable expenses from 2-3 months of bank statements, not guesswork — most people underestimate spending on food delivery, subscriptions and small daily purchases.
4. Subtract needs and wants from income; whatever's left is your real savings rate.
5. If it's negative or too low, cut from "wants" first, then renegotiate "needs" (better insurance quote, cheaper data plan) before touching savings.

Keep it working

A budget only helps if you check it against reality — revisit monthly, not just when you set it up. Check your Financial Health Score to see how your savings rate stacks up, and use our debt payoff planner if debt repayment is eating into your 20%.

This is general budgeting guidance, not personal financial advice — your own circumstances may call for a different split. This article is editorially independent; see how we make money.