Master Your Money with the 50:30:20 Rule (Plus 4 Other Budgeting Methods to Try)
- Frances
- Feb 7
- 5 min read
Updated: Mar 17
Let’s face it: budgeting isn’t exactly the life of the party. It’s often seen as restrictive, overwhelming, or downright boring. But here’s the truth—it doesn’t have to be! With the right methods, budgeting can actually be empowering (yes, empowering!) and a game-changer for your financial future. So, if you’ve been avoiding the dreaded “B-word,” stick with me. By the end of this blog, you’ll have what it takes to take control of your money and maybe even enjoy the process.
Why Budgeting Matters (and Why You Should Care)
Budgeting is like the GPS for your financial life. Without it, you’re just winging it. Crossing your fingers and hoping for the best. Not ideal. A good budget helps you know exactly where your money is going, frees you from those “Oh no, I forgot rent is due tomorrow!” moments, and puts you back in control.
One of the biggest budgeting pitfalls? Lifestyle inflation. And yes, it’s exactly what it sounds like—when your spending increases as your income grows. If you don’t get a handle on this silent drain, unexpected expenses and long-term goals won’t even stand a chance.
That’s where structured techniques like the 50:30:20 rule come in to save the day. Think of it as your financial superhero cape minus the tights, of course.
The 50:30:20 Rule: Budgeting, Made Simple
If you’re new to budgeting or want something low-maintenance, the 50:30:20 rule is a great place to start. It’s as straightforward as it gets:
50% for Needs
absolutely essential stuff like rent, groceries, transportation, and utilities
30% for Wants
20% for Savings
Here’s how it works in practice: Let’s say your after-tax income is CHF 3,000. That means:
CHF 1,500 goes to needs
CHF 900 goes to wants
CHF 600 goes to savings
Easy enough, right? The beauty of this rule is its flexibility— it adapts to any income level. And the best part? It balances the “adulting” stuff (like paying bills) with guilt-free spending and future planning. Okay, so maybe you're more of a visual learner too so scroll down to see (*bonus: you get to view it with our Fjnch birdie)
How to Implement the 50:30:20 Rule
Now that you know the basics, let’s talk about putting this into action. Follow these 4-simple steps:
Calculate Your Net Income: This is your after-tax income (aka, what you actually take home).
Categorize Your Spending: Break it down into needs, wants, and savings.
Adjust Where Necessary: Spending too much on takeout? (oops, guilty) Cut back slightly and redirect those funds toward savings.
Track Your Progress: Check in monthly to see if you’re sticking to the rule.
The secret to successful budgeting? It's not starting, but sticking with it. To show how consistent savings add up over time, here’s a graph illustrating a year of progress when you follow the 50:30:20 rule:
In this example, consistent budgeting helps you save CHF 3,900 by December. Imagine what you could do with that! Pay off debt, boost your emergency fund, or even finally book that winter getaway. Feel free to also discover how Swiss financial strategies can strengthen your long-term security.
Other Budgeting Methods to Mix and Match
Not vibing with the 50:30:20 rule? No worries. Budgeting isn’t one-size-fits-all. What works for one person might not work for another, and that’s okay! Below are five tried-and-tested budgeting techniques, each with its unique flavor. Whether you’re a data geek, a spender trying to tame impulses, or just someone looking for simplicity, there’s something here for everyone
1. Zero-Based Budgeting
Every franc has a job. With this method, you assign every franc of your income to a specific purpose until you’re left with zero at the end of the month—not zero money, but zero unallocated funds.
Best for: Detail-lovers who want total control.
How To Start
Write down your income
List every expense you have, including savings and debt payment
Assign an amount to each category until you’ve allocated 100% of your income
2. The Envelope System
Go old-school by setting cash or digital “envelopes” for each category. Once the envelope is empty, spending stops—no exceptions.
Best for: Impulse spenders who need clear limits.
How To Start
Set a budget for categories like groceries or dining out.
Use cash or a digital envelope app.
Stick to your limits—no sneaky transfers!
3. Pay Yourself First
This method flips the script by prioritizing savings. You save a set percentage of your income first, then live off the rest.
Best for: Those who struggle to save consistently.
How To Start
Decide on a savings goal (e.g., 20% of your income).
Automate your savings by setting up direct transfers to a savings account on payday.
Pair it with the 50:30:20 rule for a solid plan
4. Daily Expense Tracking
Track every expense daily or weekly to stay aware of where your money is going. Small adjustments add up fast!
Best for: Data lovers and those prone to mid-month surprises.
How to Start
Use an app like FJNCH (launching soon) to categorize and track your expenses automatically.
Set aside 5 minutes at the end of each day to review your spending.
Identify trends and areas where you can cut back.
5. The 80/20 Rule
Also known as the Pareto Principle, this method keeps it simple: Save 20% of your income first, and spend the other 80% however you like (responsibly, of course). You can learn more how the 80/20 rule applies to financial growth.
Best for: Busy people who want a low-maintenance system.
How To Start
Set up an automatic transfer of 20% of your income to savings as soon as you get paid.
Use the remaining 80% at your discretion
Track overall progress monthly, but don’t stress about categorizing every little expense
The key to successful budgeting is personalization. Experiment with different budgeting methods, or combine them. Maybe, you want to use the 50:30:20 rule for an overall framework while applying the envelope system for dining out or groceries.
It’s also important to give yourself grace. Life happens, and unexpected expenses will pop up.
Final Thoughts: Budgeting = Freedom
Here’s the one thing I want you to take away: Budgeting isn’t about restrictions—it’s about freedom. Freedom from financial stress, freedom to enjoy your money, and freedom to plan for a future you’re excited about.
The trick is to start small, stay consistent, and find a system that works for you. Whether it’s the 50:30:20 rule, the envelope system, or a mix of methods, the goal is the same: taking control of your finances so you can focus on what really matters.