Skip to content

The New 60/30/10 Budgeting Method

As inflation strains an increased number of household budgets, many financial advisors are finding that the 60/30/10 budgeting method is a better fit for many households than the long-standing 50/30/20 budgeting model. 

When using the 60/30/10 you’ll allocate 60% of your monthly income towards essential expenses, such as gas, utilities, groceries and rent. Thirty percent of your income will go towards discretionary spending, such as shopping or dining out, and the final 10% is either put in savings or used to pay off high-interest debt.

This method of spending is particularly well-suited for younger individuals who have more time to save for long-term goals, as well as those who live in high-cost cities like New York or Los Angeles. And while this method doesn’t allocate as much money towards savings as the 50/30/20 model does, a savings category is still essential to any budget. Check it out.

This post originally appeared at Kiplinger.