Mythbusted: The 50/30/20 rule

Is it possible to follow this well-known budgeting method?

Making ends meet can be extremely hard, budgeting can be confusing and saving can feel like an uphill battle. Sometimes it would just be easier to be told what to spend your money on. To that end, Elizabeth Warren’s 50/30/20 budgeting rule is designed to guide you on how to spend your salary based on your “needs”, “wants” and “savings”.

To find out if this method really does work in reality, we’ve compared the average salary for each age group and region in the UK with the cost of living. Sadly, with current salary and rent prices as they are, the 50/30/20 rule is almost impossible to follow. For those aged 18 to 30, their “needs” make up more than 50% of their income, which means they will have less to spend on their “wants” and therefore, very little (if any) money to put aside in their piggy banks. If you want more help with budgeting, check out a range of budgeting apps.

Quick overview

  • For the average Brit, 50/30/20 would look more like 62/29/9.
  • Those under 30 who are on an average salary and are renting a one-bedroom flat are not able to save anything at all.
  • Scots are most able to follow the 50/30/20 rule, thanks to the low average rent.

The method in theory

The 50/30/20 method is fairly simple. You divide your expenses into three categories: needs, wants and savings. The method says that you should budget 50% of your income for fundamentals such as bills, rent and food (needs). You should then designate 30% for hobbies, eating out and other entertainment (wants), while 20% can be dedicated to building up your savings. For example, based on the average monthly salary in the UK (£1,917), you should allocate £958.50 to your needs, £575.10 to your wants and £383.40 to your savings.

The method in practice

Regional differences

Residents from all regions of the UK would struggle to follow the 50/30/20 rule, as their needs often exceed 50% of each region’s average income. However, all regions except for the Londoners could spend less on wants to boost their savings.

Region Needs Wants Savings
East Anglia 62.20% 30.00% 7.80%
East Midlands 58.22% 30.00% 11.78%
London 85.04% 14.96% 0.00%
North East 56.59% 30.00% 13.41%
North West 58.51% 30.00% 11.49%
Northern Ireland 67.00% 30.00% 3.00%
Scotland 53.13% 30.00% 16.87%
South East 63.03% 30.00% 6.97%
South West 63.15% 30.00% 6.85%
Wales 57.33% 30.00% 12.67%
West Midlands 60.06% 30.00% 9.94%
Yorkshire and the Humber 58.25% 30.00% 11.75%

Unsurprisingly, it is hardest for those living in London, with their needs exceeding 85% of the average salary, thanks to extremely high rent. The result of this is that only 15% (£334) can be spent on wants and no savings can be made. It is also hard for residents of Northern Ireland, South West England, South East England and East Anglia. In these areas, rent breaks both the bank and the budget, sending residents way over the 50% budget for needs and meaning that less money can be saved.

Those from Scotland have the greatest chance of being able to follow the rule. Their needs category amounts to the lowest percentage of their income (53%) compared to the other regions of the UK. This means that they can spend the suggested 30% on their wants and 17% can be saved.

The theory against the reality

Region By the method In reality
East Anglia £994 (50%) £1,236 (62.20%)
East Midlands £906 (50%) £1,055 (58.22%)
London £1,117 (50%) £1,899 (85.04%)
North East 884 (50%) £1000 (56.59%)
North West £919 (50%) £1,075 (58.51%)
Northern Ireland £890 (50%) £1,192 (67.00%)
Scotland £949 (50%) £1,008 (53.13%)
South East £1,030 (50%) £1,298 (63.03%)
South West £926 (50%) £1,169 (63.15%)
Wales £898 (50%) £1,029 (57.33%)
West Midlands £912 (50%) £1,095 (60.06%)
Yorkshire and the Humber £896 (50%) £1,044 (58.25%)
Region By the method In reality
East Anglia £596 (30%) £596 (30%)
East Midlands £544 (30%) £544 (30%)
London £669.90 (30%) £334 (14.96%)
North East £530 (30%) £530 (30%)
North West £551 (30%) £551 (30%)
Northern Ireland £534 (30%) £534 (30%)
Scotland £569 (30%) £569 (30%)
South East £618 (30%) £618 (30%)
South West £555 (30%) £555 (30%)
Wales £539 (30%) £539 (30%)
West Midlands £547 (30%) £547 (30%)
Yorkshire and the Humber £538 (30%) £538 (30%)
Region By the method In reality
East Anglia £397 (20%) £155 (7.80%)
East Midlands £362 (20%) £214 (11.78%)
London £447 (20%) £0 (0%)
North East £353 (20%) £237 (13.41%)
North West £367 (20%) £211 (11.49%)
Northern Ireland £356 (20%) £53 (3.00%)
Scotland £380 (20%) £320 (16.87%)
South East £412 (20%) £143 (6.97%)
South West £370 (20%) £127 (6.85%)
Wales £359 (20%) £227 (12.67%)
West Midlands £365 (20%) £181 (9.94%)
Yorkshire and the Humber £358 (20%) £211 (11.75%)

Generational differences

To see if things look better for certain age groups, we looked at the percentage of each generation’s pay cheques that are spent on needs, wants and savings.

The bad news for those under 30 on an average salary renting a one-bedroom flat is that they’re not able to save anything at all. Between the ages of 30 and 39, the average amount people are able to save rises to 12%, still significantly below the recommended 20%.

In fact, no age group could save the recommended 20% of their salary while using 30% of their income on wants. The age group that comes nearest to the rule is 40-49-year-olds, who can save 16% on average. It then drops back down to 12% for workers over the age of 50.

Age Needs (ideally 50%) Wants (ideally 30%) Savings (ideally 20%)
18-21 93.51% 6.49% 0.00%
22-29 70.92% 29.08% 0.00%
30-39 58.16% 30.00% 11.84%
40-49 54.39% 30.00% 15.61%
50-59 58.47% 30.00% 11.53%
60+ 58.65% 30.00% 11.35%


With the current state of salary and rent prices in the UK, it’s almost impossible to follow the 50/30/20 rule perfectly, but it’s still a good rule to follow loosely if you are looking for ways to start budgeting. To help you out, we’ve put together some of our favourite budgeting tips below to get you started.

Our tips

Really understand where you are spending.
Apps like Emma let you manage multiple accounts at once and give real-time spending updates, so you can keep on top of how much you are spending and what you are spending on.

Start by saving small amounts every day.
Money Dashboard and Moneybox are apps that can help you create achievable savings targets, invest spare change and help you avoid being overcharged on bills. Additionally, challenger banks such as Monzo have a “Pots” feature, where you can hold money that is kept away from your overall balance so it’s not accidentally spent.

Make your own coffee and/or lunches.
Research has found that you could save up to £1,840 a year not buying ready-made lunches and £303 by making your own coffee. This equates to over £2,000 in savings, so it really is worth considering.

Make sure your savings are in the right place.
If you want to save, ensure your savings aren’t sitting in a current account without an interest rate. Instead, put your money to work and place it in a savings account with a good interest rate so it can grow.

Consider a stocks and shares ISA.
It may be worth considering putting some of your savings into a stocks and shares ISA. Over the last 50 years, stocks and shares ISAs have offered 5.4% interest on average, whereas savings accounts have offered just 1.9%. However, it’s always worth noting that this can result in losing money if the value of the stocks falls.


  • We first calculated the average cost of “needs” expenses. We used the average monthly cost of a phone contract, groceries, gas/electricity, water, broadband, a TV licence, home insurance and debt repayments.
  • Regional calculations: We used the regional average rent of a one-bedroom flat and combined it with the average cost of “needs” expenses to get the full cost of “needs” for each region. We then compared the total “needs” costs to each region’s average income. From the remaining salary, we took 30% for “wants” and allocated whatever was left for “savings”.
  • Generational calculations: We used the average UK rent for a one-bedroom flat and combined it with the average “needs” expenses to get the full cost of “needs”. We then compared the total cost of “needs” to the average income for each age group. From the remaining salary, we took 30% for “wants” and allocated whatever was left for “savings”.
  • Since all figures are based on averages, there could be some discrepancies.

For all media enquiries, please contact

Matt Mckenna
UK communications manager
T: +44 20 8191 8806

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