We believe everyone should be able to make financial decisions with
confidence. And while our site doesn't feature every company or
financial product available on the market, we're proud that the
guidance we offer, the information we provide and the tools we create are
objective, independent, straightforward — and free.
So how do we make money? Our partners compensate us. This may influence
which products we review and write about (and where those products appear on
the site), but it in no way affects our recommendations or advice, which are
grounded in thousands of hours of research. Our partners cannot pay us to
guarantee favorable reviews of their products or services. Here is a list of our partners.
Is the 60/30/10 Budget Right for You?
The 60/30/10 budget may help you better manage your expenses in an economy with high inflation.
Many, or all, of the products featured on this page are from our advertising
partners who compensate us when you take certain actions on our website or
click to take an action on their website. However, this does not influence our
evaluations. Our opinions are our own. Here is a list of our partners and
here's how we make money.
Updated · 2 min read
How is this page expert verified?
NerdWallet's content is fact-checked for accuracy, timeliness and
relevance. It undergoes a thorough review process involving writers and
editors to ensure the information is as clear and complete as possible.
Tiffany Lashai Curtis is a former lead writer for the Core Personal Finance team at NerdWallet. She was previously the health writer for Livestrong.com and a freelance writer for publications like Refinery29, Business Insider and MTV News, where she focused on issues that affect marginalized communities. As a wellness facilitator, she has led conversations for organizations like Planned Parenthood and Harvard University. She is based in Philadelphia.
Pamela de la Fuente leads NerdWallet's consumer credit and debt team. Her team covers credit scores, credit reports, identity protection and ways to avoid, manage and eliminate debt. Previously, she led taxes and retirement coverage at NerdWallet. She has been a writer and editor for more than 20 years.
Pamela joined NerdWallet after working at companies including Hallmark Cards, Sprint Corp. and The Kansas City Star.
She is a thought leader in content diversity, equity, inclusion and belonging, and finds ways to make every piece of content conversational and accessible to all.
She is a graduate of the Maynard Institute's Maynard 200 program, and the National Association of Black Journalists Executive Leadership Academy. She is a two-time winner of the Kansas City Association of Black Journalists' President's Award. She was also founding co-chair of NerdWallet's Nerds of Color employee resource group.
Amanda Barroso, Ph.D., is a writer and content strategist helping consumers navigate budgeting, credit building and credit scoring. Before joining NerdWallet, Amanda wrote about demographic trends at the Pew Research Center and earned a Ph.D. from The Ohio State University.
Her work has been featured by the Associated Press, Washington Post and Yahoo Finance.
Published in
Lead Writer & Content Strategist
SOME CARD INFO MAY BE OUTDATED
This page includes information about these cards, currently unavailable on
NerdWallet. The information has been collected by NerdWallet and has not
been provided or reviewed by the card issuer.
Budgeting frameworks like the 50/30/20 rule can help you map out your spending, but sticking to them isn’t always realistic. Inflation, where you live, or big-ticket expenses, such as childcare, can drive your essential costs well past the 50% mark.
If that sounds like what’s happening with your budget, the 60/30/10 budget might be a good alternative.
Here’s how your after-tax income is divided in the 60/30/10 budget:
60% goes toward essential expenses, such as housing, food and transportation.
30% goes toward wants, such as dining out, streaming and subscription services and entertainment.
10% goes toward savings and debt repayments above the minimum payments.
Here’s what you need to know before trying this budgeting method.
Stress less. Track more.
See the full picture: savings, debt, investments and more. Smarter money moves start in our app.
Pros and cons of the 60/30/10 budget
Pros
More realistic for today’s costs, which include high housing prices, childcare and rising prices at the grocery store.
Good budgeting option for young adults who have higher “startup” costs like a first apartment, buying a car, moving to a new city for a job, student loan repayments, etc.
Provides guilt-free flexibility to people with lower income households who found the 50/30/20 budget unrealistic.
Cons
Slower progress on savings and debt repayment, which may leave you carrying high-interest balances longer.
Less effective for high earners, who could afford to save more aggressively.
May hide bigger spending problems — for example, if high rent is driving costs, downsizing or relocating might be a better solution than raising your “needs” to 60%.
Knowing what debts you owe and the savings goals you have, whether it’s to build your emergency fund or save for a vacation or a home, is an important early step in budgeting.
60/30/10 for those seeing early retirement 60/30/10 for those seeing early retirement
There’s a less popular approach to the 60/30/10 budget, which calls for putting 60% of your income toward your savings goals. This strategy is geared toward people with higher incomes who may use this budget breakdown as a means to build generational wealth or retire early.
2. Track your spending
Knowing how much money you have coming in and going out is an essential part of any budget. With real numbers, you can see where every dollar is going and assess whether your current spending makes room for those savings goals you identified earlier.
You can track your expenses in a spreadsheet or use an expense-tracking app, depending on your personal preference.
3. Focus on an area of improvement
Focusing on the areas where you tend to overspend can make can make sticking to the 60/30/10 budget a little easier.
If your “wants” category exceeds the 30% threshold every month, it’s time to analyze your transactions and commit to making different choices the following month.
Do the math to calculate what 30% of your take-home pay is in real dollars. Once you have that number, it’s much easier to designate expenses: $100 for dining out, $80 for concert tickets, $20 for your favorite streaming service. Once your list is complete, start making cuts to get your spending back within that 30%.
4. Use budgeting to empower you
Mindset matters when it comes to budgeting. A budget isn’t meant to be restrictive — it’s a tool that helps you take control of your money. The goal is to cover your essentials, save for the future, and still have room for the things you enjoy.
If your budget feels too limiting or unrealistic, don’t be afraid to adjust it. Life changes, and so should your budget. Keep an eye on your spending and make regular tweaks so your plan continues to support your goals.
Stress less. Track more.
See the full picture: savings, debt, investments and more. Smarter money moves start in our app.
Article sources Article sources
NerdWallet writers are subject matter authorities who use primary,
trustworthy sources to inform their work, including peer-reviewed
studies, government websites, academic research and interviews with
industry experts. All content is fact-checked for accuracy, timeliness
and relevance. You can learn more about NerdWallet's high
standards for journalism by reading our
editorial guidelines.