The 50/30/20 budget: Money lesson notes (ages 10+)

Ages 10+ · Money · Saving and budgets

The 50/30/20 budget

The rule on 100 coins.

The big ideaThe 50/30/20 split is a rule of thumb, not a law. Fit it to your life.

How it works

Aunt Rosa shares a handy rule of thumb called fifty, thirty, twenty. Think of ten blocks, split into five, three and two.

On 100 coins that is 50 for needs, like food, a home and the bus, 30 for wants, like fun, treats and presents, and 20 for saving. 50 + 30 + 20 = 100.

A rule of thumb is a quick guide, not a law. No one split fits everyone: some families need more for needs, and others save more.

The rule shrinks to fit any month. On Mina's 40 coins a block is 4 coins: 20 for needs, 12 for wants and 8 for saving.

The same rule on Mina's 40 coins.

🥖food: needs🚌the bus: needs🍦a treat: wants🎁a present: wants🫙the jar: saving

Which part?

Example 1: The rule on 100 coins

Ten blocks of 10 coins: 5 blocks, 3 blocks and 2 blocks.
Needs 5 × 10 = 50, wants 3 × 10 = 30, saving 2 × 10 = 20.
50 + 30 + 20 = 100, every coin.

Example 2: The rule on Mina's 40 coins

Cut 40 coins into 10 blocks of 4: 40 ÷ 10 = 4.
Needs 5 × 4 = 20, wants 3 × 4 = 12, saving 2 × 4 = 8.
20 + 12 + 8 = 40, every coin.

Example 3: Saving on other months

Saving is always 2 blocks out of 10.
On 60 coins a block is 6, so saving is 2 × 6 = 12.
On 20 coins a block is 2, so saving is 2 × 2 = 4.

Example 4: Which part is it?

The bus to school is a need, so it comes from the 50.
A present for a friend is a want, so it comes from the 30.
Coins put in the jar are saving, so they come from the 20.

Words to know

rule of thumb: A quick guide, not a law.
needs: Things you must have, like food, a home and the bus.
wants: Fun things, like treats and presents.
saving: Coins put away in a jar for later.
block: One tenth of the coins.

Watch out

50/30/20 is a rule of thumb, not a law. Families split their coins in different ways.
Saving is two blocks, not two coins. How big a block is depends on the month.
Wants are okay, but they come from their own part.
Check that the three parts add back to all the coins.

Try it

On 100 coins, how many go to wants?
Mina has 40 coins in 10 blocks. How many coins is one block?
On Mina's 40 coins, how many go to saving?
Must every family use exactly 50, 30, 20?

Answers: 1. 30 coins · 2. 4 coins · 3. 8 coins · 4. No

Try at homeWith a grown-up, talk about how a family could split a month: needs, wants and saving. It does not need to match the rule.

For grown-upsTalk about how your family could split a month into needs, wants and saving. It does not need to match the rule. The point is knowing why you chose a split.

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