Hate budgeting? These simple rules could change your life

piggy banks

If budgeting leaves you bored, in knots or close to tears, these money rules could change your life.


Spoiler alert: budgets will always be in fashion. Whether you want to be wealthy or just stay on top of your money at uni, budgeting will get you there.

That said, some of us struggle to find the time, or are intimidated by the thought of using spreadsheets and maths. If that’s you, there’s a simpler way.

Why use a money rule?

These money plans strip budgeting down to the basics.

  • Instead of tracking every penny you spend, you just decide and stick to one or two broad limits.
  • You don’t need complicated maths or fancy spreadsheets. A calculator and a notebook will do.
  • It’s easier to build savings or reduce debt – two crucial ingredients in being better off.

While there’s much less detail than traditional budgeting, you still need self-discipline! If you find it tough sticking to spending limits, or often struggle to pay important bills, speak to a money adviser at Citizens Advice or your university for extra help.

The 50-30-20 rule

It’s not the combination to my piggy bank: 50-30-20 is the name of a money management rule. It became popular after US Senator Elizabeth Warren wrote about it in ‘All Your Worth: The Ultimate Lifetime Money Plan’, and readers loved the simplicity.

Choose a day at the end of the month (or your pay day, if you get a regular salary) and add up how much money you’ll have available to spend over the next 30 days. Include wages or side hustles, Student Loan or other funding, State benefits, family support and interest from savings.

Using your total monthly income as a guide:

  • Aim to spend 50% of it on needs. These are essential things you have to pay every month without fail, such as rent and bills.
  • Allocate the next 30% on wants. These are non-essentials which make life easier or more fun: nights out, hobbies, magazines and music subscriptions. You can even treat yourself on a budget.
  • Put the final 20% towards savings or paying off debt.

50-30-20 budgeting rule

Once you’ve worked out your limits for each category, keep an eye on how much you’re spending so that you don’t blow more than you can afford.

The 80/20 rule

If you think the 50-30-20 sounds easy, hang on to your pants: the 80/20 rule is almost effortless.

Sit down at the start or end of the month and, using your total income as a guide:

  • Put 20% into savings, paying off debt or toward other financial goals.
  • Spend the remaining 80% however you need to.

80-20 budgeting rule

Don’t be fooled by the simplicity, though. Before you start spending the 80%, work out what those things will be and what you can afford!

What does it look like in real money?

Let’s say you have £700 of take-home pay, student finance, benefits and any other income.
Using the 50-30-20 rule you can spend:

  • 50% or £350 on essentials like rent, household bills and getting to work / uni
  • 30% or £210 on meals out, gym membership, magazines and Netflix
  • 20% or £140 for savings, paying off credit cards or personal loans.

With the 80/20 rule, it looks like this:

  • 20% or £140 for savings and clearing debt
  • 80% or £560 for everything else.

Your numbers will vary depending on how much you earn, and could be different from month-to-month as your income or costs go up and down.

Using rules to manage your money

financial planning diary

Money rules make budgeting easier. Using them successfully takes a bit of common sense.

  • Pick your essentials. Just as with traditional budgeting, you’ll need to prioritise your costs. It’s easier if you figure out your needs and wants before you pick a plan.
  • Plan ahead. After deciding on your percentages, take a minute to think about what that really means. How much money is it? What does it have to pay for, and when?
  • Split cash to keep it safe. Put 20% in a savings account immediately, and stash the rest in a current account. You may even want to split spending money across further accounts to keep cash for bills and other important costs separate.
  • Know your numbers. The percentages are spending limits, so you need to find ways to live within your means.
  • Be moderate. The beauty of the 50-30-20 rule is that it leaves you a generous amount for stuff that makes you happier. It’s not for things you can’t afford or don’t really need!
  • Practice cutting back. No matter your budgeting style, look for ways to spend less. Shop smarter, move to cheaper accommodation, regularly switch bill and bank providers: keep challenging yourself to make your money go further.

People counting their money

Budgets aren’t set in stone. In fact, you should keep tweaking your money plan until it works for you. You might find you need more structure than the 80/20 rule gives – so try the 50-30-20, or move up to traditional budgeting. You might even rejig what you consider essential spending, and that can be mind-blowing (in a good way!). Not everything will go perfectly the first time, and that’s OK: the important thing is to have a go and see where it takes you.

Guest poster Ruth Bushi, Editor of Save the Student

Guest post written by Ruth Bushi, Editor of Save the Student

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