The 50/30/20 rule

[Savingadime]

What is your view on this and how strictly do people stick to it?

I currently have more of a 30:10:60 ratio I.e 30% bills, 10% fun spending and 60% savings/ investing. That will change dramatically when I have children (more along the lines of 80:10:10) given the cost of nursery fees here.

I would love to hear from others how they cope with a less than ideal ratio?

Silly rule IMO!

Firstly it's about actual ££, not % for me. Second time of life changes everything immensely. Third it is very different for high earning households v low income households.

So altogether rather pointless.

It’s a great concept to have as a goal or rough guide, but how possible it is depends on your income and where you live really.

We stick roughly to it, bills will go above 50% when our second child is born and starts nursery next year but not horrifically higher, but it just does depend. We are quite lucky in that we both have relatively good jobs and also we live in an area where house prices aren’t ridiculously high so it does balance quite well.

We have friends who have almost exactly the same income that we do and live in essentially the same house we do but they live down South where that same house costs double what ours does, so their bills are skewed far higher as a result.

It doesn’t seem to make any sense because I can’t ever imagine being in a position where if I earnt £2k per month, I’d spend £1000 on bills and then feel comfortable spending £600 on “fun” money!

It depends how different households manage finances. If the £1000 is your absolutely essential bills then for some people their car finance comes out of “fun money”- lots of people spend £200+ a month just on that which takes you down to £400.

Then you might have a gym membership, £30 a month maybe? Go out for dinner every other week with family/friend, £50 maybe? Birthday/wedding/christening party etc so gift needed, fun money again. Cinema trip? Coffee or drinks with a friend? A takeaway?

People I know who do it strictly will count things like a meal deal, coffee before work, crisps/chocolate as coming from fun money so you can see where your £600 would go.

I hadn’t thought of those as “fun” money items so I absolutely see your point. Maybe I should look at it as wants versus needs because a coffee before/ during work is a want rather than a “fun” item (or arguably a need) 😂

Definitely! Everyone does it differently, we don’t track it as carefully as that but I know people who do and I can see where even just your coffee before/during work could take up a quarter of your “fun money” budget.

Strictly its supposed to be

Bills as in essential, fixed costs so mortgage/utilities/basic food shop.

Savings/investments.

Fun is everything else basically so coffees, crisps, snacks, gym, cinema etc all falls here and would add up fast!