How to use the 50-30-20 method to balance your budget

Key takeaways

• The 50-30-20 framework helps balance essential expenses, enjoyable 'wants', and savings to build a more stable financial future.

• Small, regular habits - like using the 15‑minute method and setting savings aside each month - make budgeting easier and more effective.

• Rewards, cashback, and timely reminders for renewals can help your money go further and keep your budget on track.

Every month, you'll have non-negotiable expenses, such as the mortgage or rent, council tax, energy bills, transport and food bills.

You'll also have ‘wants,’ such as new clothes, tickets to a band or a show, or meals out. These are all things you can live without, but having them makes life a whole lot more enjoyable.

It may seem hard to balance everything, but with some careful planning, you can fit both needs and wants into your budget – while still managing to set money aside for emergencies, and for the future.

Try the 50-30-20 framework

If you’re looking for a bit of help with your budgeting, you might want to try the 50-30-20 framework.

This popular budgeting method involves splitting your earnings three ways:

• 50% going on things you 'need': this covers all of your essential expenses, like rent or mortgage repayments, food shopping, transport - all the things you can't live without

• 30% going on things you 'want': this covers things that are nice to have but not necessary, like days out, gym memberships, streaming subscriptions, and little luxuries

• 20% going into 'savings': this can cover a multitude of things, including putting money into a savings account, making pension contributions, and investing.

The 50-30-20 framework can be a useful starting point for anyone looking to take charge of their money.

By helping you prioritise essential costs while still setting aside funds for the things you enjoy, it creates space to make smarter choices - like switching to better-value deals and making sure your money is working as hard as possible for you.

Making a habit of purposely setting money aside to save also helps you make the most of it. By putting a bit of money each month into a savings account, you can prevent it from being used up by other expenses and put it to work generating interest.

With Savings by MoneySuperMarket, you can quickly and easily compare savings accounts to find the best rates and claim SuperSaveClub rewards too.

To get started, use our budget calculator to see how your current budget compares to the 50-30-20 framework

Use the 15-minute method

One of the most common reasons people give for not sorting out their household budget is a lack of time. When you've got other responsibilities to worry about, budgeting can easily fall down the list of priorities.

It can also be daunting to sit down and sort through a budget, especially when you're feeling anxious about what you're spending.

To combat that pressure, try the 15-minute method to break down those big financial tasks into smaller, more manageable ones.

Little and often goes a long way when managing a budget.

Once a week, set aside 10 or 15 minutes to tackle a single financial task - whether it's cancelling some unnecessary subscriptions, moving money into your savings accounts, or setting reminders for your insurance renewal dates.

Make your money go further

Grabbing rewards, discounts, and cashback where you can is one way to stretch your budget even further, giving you a little extra to add to your 'wants' and 'savings'.

While these rewards might seem like small tokens on their own, they can easily add up.

MoneySuperMarket’s SuperSaveClub combines online comparison tools and rewards into one place. Members earn practical benefits - including a Free Days Out Annual Pass worth £180*, up to £20 in rewards for qualifying switches, exclusive discount codes and cashback opportunities - all designed to make essential bills easier to manage.

Most supermarkets now offer loyalty cards that can make a big difference to your everyday shop. Not only can you collect points and rewards but many also offer exclusive discounts and deals, including reduced prices for everyday items.

And don't forget to sign up to cashback websites like Quidco. You'll often find special offers going on, so the next time you need to do some online shopping, it's worthwhile to check if you can get some extra cashback at the same time.

Reward credit cards are another great way to earn extra cashback and perks on your everyday purchases. However, these often come with high interest so should only be used if you can afford to pay them off in full each month.

Put it in your calendar

To stay on top of your budget, it's important to keep it in mind. Make note of important dates to plan your budget around and set yourself reminders leading up to them.

These are a few things we suggest you set reminders for to keep on top of them:

• Loan and credit card repayment due dates

• Subscription renewals

• Broadband contract end dates

• Mobile phone contract end dates

• Insurance renewal dates

• Tax return deadlines

When you do this, you put yourself in the best position to avoid missed payments, cancellation fees, or high renewal prices.

Renewing your insurance is one of the most important times to take control of your money. You’ll usually get a better deal by comparing prices rather than letting your policy auto‑renew.

The best time to compare car insurance, for example, is around 3 to 4 weeks before your renewal date - or between 20 and 29 days. This is when you're most likely to see the best prices for your policy.

But if you leave it too late, prices will start to go up, so set a reminder to hit that sweet spot.

Budgeting tips

• Be realistic. Setting unachievable goals could mean you end up worse than you were before

• Make adding to your savings a priority, even if it's just a couple of quid. A little bit regularly will add up over time.

• Be disciplined about sticking to your budget

• Track your spending and your progress

• Accept that your budget may need to be tweaked from time to time. Some expenses could go up, or you could get a pay rise or take on a side hustle, meaning you have more money coming in each month. Adjust your budget in line with this

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