The 60-20-20 Budget will teach you how to actually save money!

Have you heard people talking about the 60 20 20 budget lately? I definitely have! We’ve talked before about how my family uses a zero based budget. If you haven’t read that post, you can click here to check it out. But what if our zero based budget format isn’t the one for you? Different budgets work for different people. I’m here to help you handle your finances, not force you to handle them exactly how I handle mine! Maybe a 60-20-20 budget is the one for you!

What is a 60-20-20 Budget?

It’s not as complicated as it may sound. Basically, a 60-20-20 budget splits your take-home (after tax) pay into 3 parts.

  • 60% goes to your living expenses: food, shelter, utilities, transportation. All your fixed expenses you need to live!
  • 20% goes to saving/investing.
  • 20% goes to discretionary/fun money. Things like event tickets, dates, hobbies, whatever you like to do.

Boom, 60-20-20.

Who is the 60-20-20 Budget good for?

It can be good for anyone!

In my opinion, this budget can be incredible for somebody who struggles with saving. The person who’s always lived paycheck to paycheck. The person that sees more than $0 in their account the day before they get paid & goes and spends it all “just because.” The 60-20-20 budget teaches you to track your spending, focus on saving, and separate wants from needs.

It’s perfect for people who need to learn to get their finances under control. The 60 20 20 budget is super straight forward, which makes it beginner-friendly!

How to Start a 60-20-20 Budget

To begin, we need to figure out what your take-home pay is! This is the number we’ll start from.

For the sake of demonstration, let’s say you bring home exactly $1,000 a week after deductions, so an even $4,000/month.

Multiply your income by 0.6

ex: [4,000 x 0.6 = 2,400]

$2,400 is 60% of your pay.

Then multiply your income by 0.2

ex: [4,000 x 0.2 = 800]

$800 is 20% of your pay.

Your “Goal” for each portion of your 60-20-20 budget is: $2,400$800$800

Now, we need to analyze all of your expenses, and decide what category they fall under. Write out all your expenses, either on paper or in a spreadsheet if that’s what works for you.

What to include in your “60”

Living expenses such as rent/mortgage, utilities, household bills, food, car insurance, etc.

What to include in your lifestyle “20”

Discretionary spending, such as event/movie tickets, date nights, travel, etc.

Your final “20” is exclusively for saving/investing.

This is easy.

What if my numbers don’t fit exactly into my 60-20-20 budget?

That’s the beauty of managing your finances: it doesn’t need to be perfect. Especially not at first.
If you spend more like 65% of your income on your absolute necessities, that’s fine. If you aren’t big on going out and you don’t have expensive hobbies, and therefore only need 10% of your income for lifestyle expenses, that’s fine too. Allocate the other 10% to saving! 65-25-10 is fine too.

It’s your money, make it work for you.

I think the point of a 60-20-20 budget is the emphasize the importance of saving. Having a perfectly even 60-20-20 ratio isn’t the point. Prioritizing SAVING and true “needs” over “wants” is the key.
Save that money.

I have an entire post discussing what my savings plan looks like. If you’re interested in learning why I have so many savings accounts, this post is for you.

What do you think of the 60-20-20 budget? Do you struggle with prioritizing saving? Do you think this budget method would help you? Let me know in the comments below!

Save this image on your Pinterest page for referencing later!

I really appreciate you sharing with friends and family that need to see this!

Start actually saving money every week, and stop living paycheck to paycheck. The 60-20-20 budget makes saving a priority.



  1. candy
    December 11, 2018 / 10:41 am

    This is an interesting way to break down the paycheck into a budget. Will have to sit down and give it a try.

  2. December 11, 2018 / 11:54 am

    This information is fantastic! I am pinning it for later! Great info!

  3. Alexandra
    December 11, 2018 / 6:07 pm

    I absolutely love this idea! I will definitely put it into practice 🙂 Thanks for the tip!

  4. December 11, 2018 / 9:05 pm

    My husband and I worked on our budget for 2019 yesterday, and it just naturally came out to be about these percentages (I hadn’t heard of the 60-20-20 before). I’m excited to read about your zero budget also!

  5. December 12, 2018 / 6:54 am

    me and my husband have been using this system for years. we’ve always don e well with it

  6. December 12, 2018 / 8:09 am

    This idea is great! I will have to see what percentage of our money goes towards living expenses, I’m curious now!

  7. December 12, 2018 / 2:09 pm

    I love this, honestly i’m going to try it as I have a huge prob saving! Thanks for this post.

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