There are two main ways to budget. The first is more well-known. As with most things, you can adjust according to your goals and personal situation. This article will look at the 50/30/20 budget versus the 60/30/10 budget.

50/30/10 Budget Versus 60/30/10 Budget

Calculating A Budget

You want to calculate your budget using your after-tax income. Smart Asset has a simple calculator to determine the amount of money you have left over after you pay your taxes. You could then choose which budgeting method you prefer: 50/30/20 or 60/30/10.

50% For Necessities

The most common budget is the 50/30/20 budget. The 50/30/20 budget gained popularity because it is simple and easy to remember. Five main categories are broken down as necessities for the 50/30/20 budget:

  1. Housing (own, rent, taxes, maintenance, et cetera)
  2. Utilities
  3. Transportation
  4. Food
  5. Insurance (health, house, car, et cetera)

Housing Budget (30%)

A note on housing. Spending no more than thirty percent of your income on housing is recommended. This is to help you to be able to have money to spend on other needs.

The 30% rule can help you find an apartment or house within your budget. You want to continue to live below your means. Other costs you want to include in your house budget are the cost of utilities, real estate taxes, HOA fees, et cetera.

You always have the option to move to a smaller living space. Rent versus own.

30% For Wants

The next part of the 50/30/20 budget is broken down for your wants. You spend thirty percent on your wants. Some common wants include:

  • Entertainment
    • Going to the movie theater or renting a movie
    • Going out to eat
    • Going out to the bar
  • Subscription services
    • Newsletters
    • Streaming services
    • Music services
  • Purchasing beer, wine, or liquor
  • You may buy coffee when running errands instead of making it at home.

One of the biggest ways I wasted money in my twenties was thinking I needed to go to the sports bar every weekend to be “social.” I do not enjoy sports, yet I needed to leave my apartment.

20% You Save

You then save the final twenty percent. Here are some ways that you can save or direct your saved money:

  • Basic saving account
    • Your basic savings account at a large bank continues to pay close to zero percent.
  • Higher-interest saving account
    • You can find higher savings accounts to pay you a higher interest rate. These are called high-interest savings accounts.
    • A high-interest savings account allows you to grow your money faster each month. Compared to earning zero percent, you could now earn up to 5.05% APY.
    • The rates will vary from bank to bank. Look around and figure out which financial institution works best for you.
    • Interest rates can change at any time. The Federal Reserve dictates interest rates.
  • Certificate of Deposit (CD)
    • You should not withdraw your money from a certificate of deposit (CD) once you put it into a CD account. If you do, you will face a penalty. CDs are best for medium to long-term savings goals.
      • For the money you do not intend to use, you could put it into a certificate of deposit. You can find CDs that pay 5.38% APY. The rate and amount of time will depend on the financial institution. You could use a CD to save for a longer-term purchase, such as a house.
  • Build an emergency fund.
    • Aim to save at least one year’s income to cover any emergency expenses that may come up.
  • You can invest some of your money into the stock market, real estate, or business.

Saving money can help to teach long-term thinking.

60/30/10 Budget Breakdown

  • Mortgage/Rent – 20%
  • Bills and Insurance – 20%
  • Housing Upkeep – 20%
  • Savings – 10%
  • Investments -10%
  • Renos/Projects – 10%
  • Gold – 5%
  • Silver – 5%

How Does The 60/30/10 Budget Work?

The 60/30/10 budget breaks down your budget into three main categories: fixed expenses, investments, and precious metals.

60% For Fixed Expenses

You will allocate a total of sixty percent toward fixed expenses. You can always decrease this number.

Housing (10%)

This budget allocates twenty percent of the first sixty percent toward housing. If you do not have to deal with upkeep and maintenance for the house, you could spend more on housing to get closer to the thirty percent rule.

The amount you spend will depend on where you live. You may have roommates. You may live with your family. You may live farther out than closer to the city to save money.

When you rent or have a condo that requires less maintenance, you can save and invest the extra money from the first sixty percent. You can use it to grow the thirty percent number discussed below.

A Note On Paying Your Mortgage Or Rent

At most, pay 34% of your disposable income on your mortgage or rent. Spending that much each month on a mortgage will make you a slave. You live above your means if you pay more than 34% monthly on your mortgage. This means that you live in a neighborhood you cannot afford.

Bills And Insurance (10%)

The next twenty percent covers your bills and insurance. These will be fixed bills that you know that you cannot avoid. Some common examples include insurance, groceries, and transportation. You will want to plan for health, car, house, or rental insurance.

Housing Upkeep (10%)

You want to save ten percent monthly to deal with home ownership costs. Examples include house upgrades, yard maintenance, water leaks, and other common housing problems with an aging house.

30% For Savings/Investments/Projects

The second thirty percent goes toward your savings, investments, and home projects. You can save a minimum of ten percent of your monthly income. You could put it into a savings account, high-interest savings account, or a money market account.

Savings Accounts (10%)

A savings account is how you can begin to build wealth. You can then find ways to invest the excess money you have each month.

You want to keep the bare minimum of savings in your low regular savings account to help cover your expenses for your checking account. You can create a spare savings account for investments, retirement, and an emergency fund. For money you don’t plan to for the medium to long term, you want to keep it in a high-interest savings or money market account. This will help your money to grow for you.

You can only save so much. You then reach a point where you must find a way to make your money work for you. As you increase your savings, you can learn about investing.

Investments (10%)

The next ten percent goes into investments. Investing is a broad term for anything that may generate a higher return on investment than you put into it. Real estate, the stock market, and an online business are common investments. Investments are not without risk. It would help if you decided on the right investment strategy that meets your financial goals and risk tolerance.

You can decide your investment strategy. Will you follow the traditional 60/40 stock to the bond portfolio, George Gammon’s 10/80/10 strategy, or the Dragon Portfolio? You could come up with your variation too.

Random Projects (10%)

The final ten percent you save for random projects that come up or that you did not anticipate. It could be that your car encounters a problem. You bring it in to be fixed. There is an issue with your house that needs a look at.

You could consider creating an extra bank account for projects and house upkeep. You only use it when problems related to your house or a random project need your attention. This will help you from using the money in your emergency fund or other savings accounts.

10% In Precious Metals

This budget’s third part saves ten percent of your monthly budget into real money. You are exchanging your devalued currency for gold and silver. You can adjust the percentage for this one if you are more bullish on gold or silver. Precious metals won’t make you rich. They are intended to help you secure your net worth.

Why Should I Put Money In Precious Metals?

Gold and silver are a store of value. Gold and silver both have the qualities of money. Money is different from currency. Gold and silver both play a vital role in technology too.

Gold is a way to preserve your wealth. You can store more money in a one-ounce gold bar than keeping it all in your bank account. Your savings account depreciates due to inflation, even if you have a high-interest account. You are likely still not beating their real rate of inflation.

Silver is a commodity metal. Silver has a range of uses. Silver is used in electronics, jewelry, to solar panels.

Basel III reclassified gold as a tier-one asset. The new Basel III standards came into effect in 2023.

The purpose of precious metals is for generational wealth. You can pass these down to your children and grandchildren. One day, your grandkids will go through your stuff after you die.

They may find your gold and silver coins and bars among your junk. They may also find your other sterling silver jewelry or other things that you have that are made from precious metal. You will be passing treasure down to your future generations. This is a way to show your future children and grandchildren that you were not thinking one year or ten years out with the stock market. You were thinking beyond your lifetime.

Precious metals are a boring investment. It is the polar opposite of the current excitement with AI stocks. Precious metals are an insurance policy to preserve your wealth.

Figure Out Which Strategy You Prefer

You can decide which budgeting strategy you prefer. You can always modify each to your particular situation. You may own a home but do not need much maintenance this year. You could save or invest some of that year that would have been spent if you had a house that needed maintenance.

Or, you may spend most of your money on rent due to the cost of living crisis. That means you will have less money to save or invest each month.


You can use these two main budgeting strategies to begin to get your financial life in order. These are more like general guidelines. Feel free to modify each according to your situation.

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James Bollen is the Founder and President of Secure Single. He is an entrepreneur and a content creator with the goal of helping all different types of singles to learn to thrive as a single person.
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