Do you feel like your money disappears every payday? You are not alone. Budgeting is not always easy, especially when life is expensive and unexpected bills show up at the worst possible time. That is where the 60 30 10 budget method can help.
This is one of the simplest ways to understand where your money goes and how to regain control. There is no complicated tracking or spreadsheets unless you want them: just three clear categories and a bit of planning. It is a no-fuss, straightforward budgeting method.
What is the 60-30-10 budget?
The idea is simple: you divide your after-tax income into three parts.
Sixty percent of your money goes toward the things you can't live without – your essential living expenses like rent, bills, food and travel to work. This covers the basics that keep your life running day to day.
Thirty percent is for the fun stuff. Things you want but don't necessarily need. Think meals out, new clothes, streaming services and holidays. This is your discretionary spending, which adds some joy to your budget.
The final ten percent goes towards your financial future. That could be savings and debt repayment, your emergency fund or contributions to a retirement account. It is about planning and giving yourself a little breathing room if something goes wrong.
Why it works
Most people overspend because they are not sure where their money actually goes. They check their bank statements, but the numbers don't mean much without context. The 60-30-10 rule gives you that context.
It is flexible, too. You are not being told how much to spend on each item – just how to split your monthly take-home income to keep you covered now and set you up for later.
If your costs are high now, for example, if you are adjusting to the impact of the substantial inflation over the last few years, rising housing prices or have high-interest debt to repay, you can tweak things. You may need to put more than 10% toward paying off your credit card debt or personal loans and a little less into short-term fun. The idea is to make the method fit your life, not vice versa.
A closer look at each category
Let's say you bring in £2,500 a month after tax. Following the 60 30 10 budget, you would aim to spend around £1,500 on essentials like rent, energy bills, council tax, food and transport. That gives you room for life's basics without stretching too thin.
The next £750 goes to the things you enjoy. Nights out. Weekend trips. A gym membership. If you are self-employed, you might include some business expenses here, depending on what is considered essential for your work.
The remaining £250 is where you start building real financial health. You might use it to top up your savings accounts, contribute to a retirement savings pot (especially if there is employer support with extra contributions) or chip away at debt repayment. Debt repayment is where you should start if you are only making the minimum payments on a credit card or have other high cost debt. Once those are covered, the extra money can go toward your savings goals, like a deposit, home improvements or building wealth.
How to get started
To get started, sit down with your bank statements and look at where your money is going today to see how your current spending stacks against this method.
Some people like to use a separate account for each category or some banks, like Monzo, provide a "pots" feature which allows you to divide your money within one account. It is not essential, but it can make tracking more manageable, especially if you are the kind of person who prefers clear boundaries.
Once you are up and running, remember to look at your spending every couple of months and consider whether your budget continues to be realistic for your current situation. If it is not, make a few changes.
Is it the right budget method for you?
There are many different budgeting methods you can use. However, the 60-30-10 budgeting method is an excellent option for a realistic and non-restrictive approach. It keeps you focused on your essential needs while also giving you space to enjoy life and build a financial safety net for whatever comes next.
