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30 30 30 10 Budget Method – Everything You Need to Know

30 30 30 10 Budget Method – Everything You Need to Know
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Budgeting methods come in all shapes and sizes, so how do you know which is right for you?

The 30 30 30 10 budget is one budgeting method that helps you keep track of your income and all your expenses while helping you reach your money goals. It’s a good budgeting plan that enables you to stay on track, but it’s not for everyone. If you’re ready to dive in, here’s everything you need to know.

What Is the 30 30 30 10 Budget?

The 30 30 30 10 budget is one of the percentage-based budget plans to help you stay on track with your financial goals. It enables you to categorize your spending to help you stay on track, know where your money goes, and reach your goals. Using your net income when creating this budget is important to ensure you don’t overbudget yourself.

Housing 30%

Allocating 30% of your income to your housing expenses, such as the mortgage payment or rent, keeps your housing costs under control. It’s easy to become house-poor, but sticking to this strategy helps you avoid that.

Needs 30%

Spending 30% of your income on needs, like food and utilities, ensures you have enough to keep your family comfortable but don’t get out of control with your spending.

Goals/Growth 30%

Earmarking 30% of your income for financial goals, such as debt payoff, an emergency fund, or growth, such as saving for a down payment on a house, can ensure you reach your financial goals.

Wants 10% 

Everyone needs room in their budget for wants, AKA things they don’t need but would like. This includes things like eating out, unnecessary shopping, travel, and entertainment.

Related: Check out our budget categories checklist here!


It might help to see the budget in action, so here’s an example!

Joe makes $75,000 per year or $6,250 per month. He’s married with one child, and his after-tax income is $4,875 per month.

To keep on track with his monthly expenses, Joe wants to use the 30 30 30 10 budget so he and his wife can save for a larger house to expand their family.

Here’s what his budget looks like:

  • Housing – $1462.50 This covers his mortgage, taxes, insurance, and maintenance costs.
  • Needs – $1462.50 This covers utilities, food, health insurance, doctor bills, and medications.
  • Goals – $1462.50 Joe doesn’t have any high-interest credit card debt, so he can put the full amount away to save for a house. If he has to use any of his emergency fund, then he should replenish it and then continue saving for a house.
  • Wants – $487.50 This covers entertainment for Joe and his family, eating out, and paying for extracurricular activities for their child.

How the 30 30 30 10 Budgeting Method Works

Fortunately, it’s easy to use the 30 30 30 10 budget. You just need exact income and expense figures to ensure your bills fit within the budgeting method. If it doesn’t, don’t feel bad, it’s not for everyone.

Before ditching it, determine if you’re overspending in certain areas or if it’s just not a feasible method for you.

Here are the steps:

Evaluate Your Monthly Income

Budget 1

You must know your household income to set up the 30 30 30 10 budget. This includes all income your family brings in from your 9 to 5 jobs and any extra money you bring in from side hustles or investments.

If you earn a salary, it’s easy to determine your monthly income. However, if you’re paid hourly, or your pay fluctuates, it’s best to use the lower income you receive on your ‘off months’ so you don’t go over the budget.

Calculate and Categorize Your Expenses

Next, you need to understand your expenses. You might not realize everything you pay for every month, so pull your bank statements from the last six to twelve months and your credit card statements. This will give you a clear picture of what you spend and your spending categories.

Fixed Expenses

Most households have fixed expenses, such as housing costs, insurance, car payment, and memberships. Total your fixed expenses to determine what you will pay each month.

Variable Expenses

Variable expenses are those that change each month, or they may not even occur each month. For example, utility bills often fluctuate, as do groceries and entertainment.

Periodic Expenses

Periodic expenses are those you pay a few times a year or less. For example, if you pay your auto insurance every six months or you have a pet that needs vaccinations annually, you have periodic expenses you must figure into your budget.

Related: Check out our monthly bills tracker here!

Create Financial Goals

A big part of this budgeting method is saving for financial goals. This may include big goals, such as saving for a down payment on a house, or smaller goals, like paying off a credit card. The key is that you save 30% of your income each month for your financial goals and allocate the funds appropriately so you meet your basic necessities and have money in your savings account for your large goals.

Adjust Habits to Meet Your Goals

After you crunch the numbers, you might find that your habits don’t align with the budgeting method. That’s okay because now you know what’s happening and can adjust.

For example, if your needs category has too much spending, consider finding ways to cut back. For example, you might look for cheaper insurance, find ways to decrease utility usage or cut back in other areas.

On the other hand, you might find that you’re not saving money frequently enough to meet your financial goals, or you’ve restricted your spending categories so much that you don’t spend 10% of your monthly income.

Benefits of Using the 30-30-30-10 Budget

Any budget plan has benefits. When you monitor your spending and ensure you cover your living costs, save money for the future, and allocate funds for non-essential expenses, you put yourself in a good financial situation.

Specifically, the 30 30 30 10 budget has the following benefits:

  • It’s easy to implement – You split your income into simple categories and make your spending fit into them. Anyone motivated enough to get on a budget plan can implement it.
  • It prioritizes financial goals – Many budgets don’t prioritize financial goals, but this budget method gives it equal footing with housing and necessary expenses, making financial goals a priority.
  • It’s not restrictive – Spending 10% of your income may not sound like a lot, but when you budget for it, you’ll know what you can spend to keep your budget under control while still having fun.
  • Provides a way to monitor your habits – It’s easy to fall off the wagon after setting up a budget, but with this method, you can easily distribute the cash for each category and monitor your spending. You can adjust your spending next month if you go over a category.

Determining if the 30 30 30 10 Budget Is for You

Not all budgeting strategies are right for everyone. Here’s how to tell if the 30 30 30 10 budget is right for you.

Good Fit

  • You want to focus on your financial goals.
  • You like a clear structure to your budget, knowing exactly how much you can spend.
  • You have low to moderate income and live in a low to moderate cost-of-living area.
  • You constantly overspend and want to get your budget under control.

Not a Good Fit

  • You live in an area with a high cost of living.
  • You don’t like to feel restricted with your unnecessary spending.

How 30 30 30 10 Compares


There are many budgeting methods that you can use; the 30 30 30 10 budget is only one of them. If it doesn’t seem like a good fit, here are a couple of other budgeting strategies to try.

30-30-30-10 vs 50-30-20 Budget

The 50-30-20 budget is another budgeting method to help you meet your financial needs. Here’s how it works:

  • 50% of your income covers your needs, including your housing costs, and other necessary bills, such as insurance, utilities, food, and loan payments.
  • 30% of your income covers your wants, including dining out, entertainment, shopping, and travel.
  • 20% of your income covers your debt repayment, money to reach your savings goals, and money for other things, such as buying a house or car.

This budget is less restrictive because 30% of your budget can cover ‘wants.’ However, this budget doesn’t have the same focus on financial goals, which can make it take longer to reach your goals.

Related: Check out our debt payoff thermometer here!

30-30-30-10 vs 80-20 Budget

If you’re good with your money and just want something to keep you in line, the 80-20 budget may be a good option.

This budget is much less restrictive as it lumps your needs and wants into one category, allowing it to take up 80% of your income. You then allocate 20% of your income to savings and debt repayment to reach your financial goals.

Only consider the 80-20 budget over the 30 30 30 10 budget if you’re pretty good with budgeting and just need to make sure you’re staying within the lines.

The Bottom Line

If you’re new to budgeting or can’t seem to stick to your money goals, the 30 30 30 10 budget can be a great place to start. You’ll feel more in control of your financial life and know that your house expenses, spending money, and money for other goals are ready for you when you need them. Looking for a friendly nudge from experts to learn budgeting rules of thumb? Check out our Budgeting Bootcamp and transform your relationship with money.