Is the 60/30/10 Budget Right for You?

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Budgeting frameworks like the 50/30/20 rule can help you map out your spending, but sticking to them isn’t always realistic. Inflation, where you live, or big-ticket expenses, such as childcare, can drive your essential costs well past the 50% mark.

If that sounds like what’s happening with your budget, the 60/30/10 budget might be a good alternative.

Here’s how your after-tax income is divided in the 60/30/10 budget:

60% goes toward essential expenses, such as housing, food and transportation.
30% goes toward wants, such as dining out, streaming and subscription services and entertainment.
10% goes toward savings and debt repayments above the minimum payments.

Here’s what you need to know before trying this budgeting method.

Pros and cons of the 60/30/10 budget

How to get started with the 60/30/10 budget

1. Set short- and long-term financial goals

Setting clear short- and long-term money goals can help kick-start your budget and keep you motivated for the long haul.

Knowing what debts you owe and the savings goals you have, whether it’s to build your emergency fund or save for a vacation or a home, is an important early step in budgeting.

60/30/10 for those seeing early retirement

2. Track your spending

Knowing how much money you have coming in and going out is an essential part of any budget. With real numbers, you can see where every dollar is going and assess whether your current spending makes room for those savings goals you identified earlier.

You can track your expenses in a spreadsheet or use an expense-tracking app, depending on your personal preference.

3. Focus on an area of improvement

Focusing on the areas where you tend to overspend can make can make sticking to the 60/30/10 budget a little easier.

If your “wants” category exceeds the 30% threshold every month, it’s time to analyze your transactions and commit to making different choices the following month.

Do the math to calculate what 30% of your take-home pay is in real dollars. Once you have that number, it’s much easier to designate expenses: $100 for dining out, $80 for concert tickets, $20 for your favorite streaming service. Once your list is complete, start making cuts to get your spending back within that 30%.

4. Use budgeting to empower you

Mindset matters when it comes to budgeting. A budget isn’t meant to be restrictive — it’s a tool that helps you take control of your money. The goal is to cover your essentials, save for the future, and still have room for the things you enjoy.

If your budget feels too limiting or unrealistic, don’t be afraid to adjust it. Life changes, and so should your budget. Keep an eye on your spending and make regular tweaks so your plan continues to support your goals.

Amanda Barroso, Ph.D., is a writer and content strategist helping consumers navigate budgeting, credit building and credit scoring. Before joining NerdWallet, Amanda wrote about demographic trends at the Pew Research Center and earned a Ph.D. from The Ohio State University.