50:30:20

[decionsdecisions62]

The banks advise we spend 50% on needs, 30% on wants and 20% savings or debts.

I'm spending nearer 60% on needs.

What is your split looking like?

I think it will make a huge difference, depending what you consider to be a 'need'.

We all 'need' food, but you will see from numerous threads on here each month that people who spend a fairly basic amount on their weekly shop, are mocked and ridiculed by others who can't envisage spending less than about 4x the amount that others spend.

Same with heating bills - there are people who think they "need" the heating on 24 / 7 and often at a temperature that others would consider stuffy

Same with a car - if you need one (say because of your work pattern), some will spend under £1000 on a car, others will say they 'need' to spend £25K on a car "so it is reliable"

Same applies for things like hair cuts - I've seen threads where people genuinely think it is normal to spend £180 on getting their hair done......

Then, are you counting things like putting aside money for repairs / replacements / servicing each month as a 'need' or a 'want' or 'savings' ?

@UsingChangeofName has hit the nail on the head. Is Netflix a need or a want? Are school trips a need or a want?

The bank define the difference as:

Needs include. It's pretty well documented.

•	Monthly rent or mortgage payments
•	Household bills (for example electricity, gas, water, broadband, or Wi-Fi)
•	Transport
•	Essential food shopping
•	Toiletries
•	Your mobile phone contract
•	Insurance (for example, home insurance or car insurance)
•	Minimum repayments for credit cards or loans.

No Netflix isn't a need.

I categorise repairs in savings. School trips - well we want those but your kid doesn't absolutely need them I guess. They are a want.

It depends where in life you’re at ….I’m 58…kids in their 30s all dependant ….retired and returned on 3 days a week….I save 50% sometimes more ….when I was in my 2Os with babies and mortgage I saved nothing

We're all going to be in different positions financially. My ability to save has increased as I've got longer in the tooth. The amount I have to spend on myself has remained fairly stable, but I do less with it iyswim, costs increase. So I'm more 45% needs, 40% savings , 15% free to spend. I define need by the things paid for out of the joint account.

I followed the 50/20/30 split for a few months after watching the living a rich life program on Netflix. I found it was brilliant for someone who is terrible at budgeting. However I've recently become a single parent and so my essential spending is looking more like 75% of my income. Although I have budgeted (according to my spreadsheet) over 20% of my income on food so could probably cut down there

I put 15% in savings, 60% on needs & 25% on wants.

Roughly 30% on needs, 20% on wants and 50% goes into savings and investments. We could probably cut back on the "needs" because our grocery budget includes far more than the basics, we could get by on a cheaper broadband deal and we could run a cheaper car. We have been DINKs but are now expecting our first so all of this will be changing soon.

Its well document but there's still scope for variation in those costs.

Toiletries could cost virtually nothing from the supermarket. Others 'need' expensive brands and use what seems to me like huge amounts - I've seen people on here claim they buy and use whole bottles of shower gel per person per week etc.

Mobile phone contracts could average out at under £10 pm including a SIM only service and a £150 Android phone every 2/3 years but some people 'need' to be on a £50 pm iPhone contract.

If you have credit card payments and spent the money on non essentials, it's not really a need, is it?

50/30/20 is only a rule of thumb that will be hard to achieve if your housing costs are disproportionately high compared to your income. But it's good to recognise that you shouldn't spend all your money each month if possible and should try and save a fairly significant sum so that you have a buffer against the unexpected and towards any large purchases, eg so you can replace a car from savings instead of having to take out finance.

Plus which category would you put savings for annual and irregular essentials like car costs in, essentials or savings? What about your pension? Does this come under essentials or savings? Likewise mortgage overpayments?

I don't categorise saving for repairs/replacement items as actual savings: I see it as a kind of reverse-credit - I pay about £100 a month into an account that I draw from when I need to pay insurance, car tax or the toaster breaks. I don't count that as an increase in savings by £100 because the money is earmarked. I'm lucky to be able to budget that though.

I reckon we spend 60% on needs, 15% on wants and 25% savings.

I heard about this rule last year from my bank and I wish I'd known about it years ago because my life would have been so much healthier from a financial perspective.

• 50% of your income on needs: essential living expenses, such as rent/mortgage, bills, food and transport to work
• 30% on wants: discretionary spending, such as eating out, shopping, trips and subscriptions
• 20% on savings or debt: paying off debt beyond minimum payments, or putting money into a savings account, investment or pension fund

https://www.hsbc.co.uk/financial-fitness/everyday-budgeting/spending-your-income/

Of course, there's subjectivity here, so I need to spend £24 on gym membership. I'll be buying a new MacBook next year, so that will be a need that I'll be paying for in one go - I just won't save anything for that month. I like the flexibility of this rule, and the structure.

We are at over 70% on needs, 10% on savings and debt repayments, 20% on wants (although actually a lot of stuff that are probably technically needs like clothes and shoes come out of that 20%)

We are the best off we have been for a long time and I think we are doing rather well. But we are around 58% on needs, 16% on savings and around 26% on wants.

Some months I pump more into savings, like when w have council tax free months. But I think for a huge number of people, especially with the current cost of livening crisis, 50% on essentials is a pipe dream. Especially those with young children in childcare.

Ideally just 50% on needs but for many people this is higher at the moment because rents and mortgage rates have gone up a lot. Then the choice is how much you reduce savings and wants?

A fancy mobile phone contract is not a need either.

Many people still don’t have a mobile phone, but most could very easily get by with a 1pmobile.com sim which might cost many just £2 a month along with a 4 year old iphone.

Many, many people have no choice but to spend 100% on need.

Surely these templates just encourage lifestyle inflation? We normally tend to increase savings with every raise or promotion more so than our needs or wants.

Needs 27%
Wants 32.5%
Savings 40.5%

Needs are all fixed bills, monthly and annual, and fuel and groceries.

Haven't included pensions here because they come out at source and I'm just looking at take-home pay.

I haven't included bonuses which usually go into either house improvements or mortgage overpayments so I guess that's either wants and needs depending on the year.

I know what you mean @shivawn, I was thinking that about this model a day or two ago. It's still useful to have as an idea I think though.