50/30/20: a budget that fits on a napkin

In 2005, Elizabeth Warren and her daughter Amelia Warren Tyagi published All Your Worth. One idea from it went everywhere: split your take-home pay into three piles. Half for what you must pay, a third for what you want, and a fifth for your future self.

Three piles, no rocket science

You don’t need to know whether coffee cost you €43 or €47 this month. You only need to know which pile a spend belongs to.

• 50% – needs: housing, energy, groceries, transport, insurance, minimum loan payments.
• 30% – wants: eating out, extra clothes, holidays, subscriptions, hobbies.
• 20% – future: an emergency fund, extra debt payments, investing and goals.

When the numbers don’t fit

In cities where rent eats half a salary, the first pile will be bigger. That isn’t failure – it’s information. The rule is a compass, not a law: it shows which way to move. If needs take 65%, the goal isn’t 50% tomorrow, but trimming wants a little each month and giving it to the future.

A budget isn’t a list of bans. It’s a deal with yourself about where money goes before it leaves on its own.

Try it in 10 minutes

Take your last three months of spending and sort it into the three piles. You’ll see your real ratios – a better start than any ideal. In Fiplo, the category overview and the savings rate on the main screen are all you need.