Don’t get me wrong—budgeting strategies can definitely be useful when it comes to balancing grocery bills with those inevitable coffee shop indulgences. But to be honest, a lot of them leave me feeling more annoyed than motivated. Plus, the budgeting methods we used to rely on feel kind of outdated now. With incomes fluctuating more than ever and prices rising across the board, it’s gotten tougher to prioritize anything beyond the essentials. Investing in yourself and your future can seem more like a far-off fantasy than a realistic goal. Thankfully, there’s one budgeting approach that goes beyond just managing the present—it even claims to help future-you become wealthier. Let me introduce you to the 50-20-20-10 method. Ahead, I’ll explain exactly what it is, why it stands apart from other budgeting styles, and how you can use it to grow your wealth.
What is the 50-20-20-10 method?
What really makes this method unique is the goals category. Whether it’s going back to school or launching a side business, this part makes sure your money-making ambitions get prioritized. Many people feel like they can’t afford to invest in themselves in this way, but as Sellers puts it, “you have to spend money to make money.” By dedicating a portion of your income—10 percent in this case—towards something like starting a side hustle, you’re actually setting yourself up to reach that goal and benefit financially down the road. Sellers even mentions in a TikTok video that you don’t need a huge bank balance to make these goals happen—small steps over time are enough.
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“This method makes sure you’re covered where it matters, while still prioritizing the important thing most budgeting rules fail to do: helping you invest in your future.”
The idea here is to think about future-you. How can you give her the best chance at success? What will help her earn more money later on? Then, figure out your goals and map out what it takes to get there. For example, Sellers talks about wanting to become an angel investor. You might need to save up for a conference ticket or a course to learn the basics first. That’s where the 10 percent allocation comes in—to help you move toward your ultimate money-making goal. Essentially, this rule turns your current earnings into future income.
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Who should use the 50-20-20-10 method?
This budgeting strategy is perfect for anyone looking for a fresh, modern way to manage their money. It’s especially great for ambitious, career-focused, or entrepreneurial women—or really anyone who wants to enjoy life now while building financial security for later. Whether you’re starting your first big job, working on paying off student loans, or just trying to keep your financial future in sight, this method provides a practical, balanced way to stay grounded while focusing on your growth and happiness.
How to implement the 50-20-20-10 method
1. Budget for your needs
Start by addressing the strong foundation that makes any good budget: your needs. Allocate 50 percent of your income to essentials like rent, utilities, mortgage, groceries, insurance, and debt payments. This ensures your basic expenses are handled first so you can confidently decide how to distribute the rest.
2. Automate your savings
Next up, set aside a portion of your income strictly for saving. Whether you’re working toward growing your emergency fund or beefing up your retirement account, this 20 percent goes directly toward your savings goals. Decide what matters most, and make it automatic so it happens without requiring any mental bandwidth every month.
3. Leave room for desires
Once needs and savings are covered, it’s time to think about the joys in life. Whether it’s your favorite fitness class or a weekly latte treat, this 20 percent is dedicated to what makes life enjoyable. Think of it as guilt-free spending—as long as it stays within the boundaries you set for yourself. Life isn’t just about getting by—it’s also about finding pleasure in the little things.
4. Plan for your goals
Now it’s time to get real about what you want. What are your biggest dreams for yourself, your career, or your long-term bank account? Maybe it’s learning how to code, turning your art hobby into a business, or enrolling in a coaching program that could open doors. Figure out what those goals will cost, and then allocate 10 percent of your monthly income toward making them happen. That way, you’re not just dreaming—you’re actively turning those dreams into a reality and setting yourself up for long-term financial rewards.
