Wants are often called nonessentials, but these expenses allow you to personalize your budget. Can you find ways to drive less often to reduce your fuel costs?.Could shopping at a different grocery store save you money?.Can you move to a cheaper location or add a roommate?.If your budget is tight, consider the options you have to trim your necessary expenses: A single parent may consider their life insurance premium to be an essential cost, while a person with no children may not. Some people can use public transportation, but others may need a personal vehicle. While these needs may seem clear-cut, there’s still a significant amount of personal interpretation within this category. These include housing, utilities, food, transportation, healthcare and childcare. Needs are expenses that are necessary for survival and basic well-being. The rule was comprehensively covered by then-professor (now senator) Elizabeth Warren and her daughter, Amelia Warren Tyagi, in their book “All Your Worth: The Ultimate Lifetime Money Plan.” 50% - Needs The 50/30/20 rule is a budgeting technique that involves dividing your money into three primary categories based on your after-tax income (i.e., your take-home pay): 50% to needs, 30% to wants and 20% to savings and debt payments.
