Have you ever felt like you were spending too much money on the wrong things and not enough money on the right things? It can be easy to get down on yourself about your spending, but if you don’t know how much you SHOULD be spending (or not spending) it’ll be hard to make any lasting changes.

We want to help you get your spending under control for a whole slew of reasons:
  1. We want to see Christians walking in freedom, and that includes freedom from the love of money and the bondage of excessive spending.
  2. When spending gets out of hand it can cause a strain on relationships. We don’t want that for you.
  3. We believe Christians should be the most generous people on the planet.

Last week we gave you 5 steps to create a budget you’ll love, but we kind of skipped one important step… When putting together a budget (or spending plan) you have to know where to start. You have to know how much of your income should go toward specific things.

That’s what we’re going to help you with today!

THE 50-30-20 RULE

One easy way to figure out how much money you should be spending each month is to use the 50-30-20 budget rule. You can click here to get more info and to find a handy calculator. But here’s the breakdown: Each month 50% of your after-tax income should go toward needs, 30% should go towards wants, and 20% should go towards savings and debt reduction.


The main reason why we love this method is because it’s super easy. If you know your post-tax income, you just have to do a couple multiplication problems and track your spending for a month. If you’re too heavy on the wants and too light on the savings/debt reduction then make a few tweaks for the following months.

Here are the two main reasons why we don’t love this method:

  1. It’s not detailed enough. If you’re a Christian you should be asking, “Where does giving fit in? Is that a want or need, or is that considered part of savings?”
  2. It’s not flexible enough. Every person’s current situation and goals are going to be different and their spending plan should reflect that. If you’re heavy on the debt or want to retire early you’ll probably want to reduce your “want” percentage and up your savings percentage.

The 50-30-20 rule is a great place to start, but we would recommend something more like this…


Before we get to the budget breakdown we want to share what we believe is a great roadmap for financial health. You may have heard of Dave Ramsey’s Baby Steps. Well…

Art Reiner has put together 8 Money Milestones, and if you keep these in mind while you’re looking at your current spending, you’ll end up fast tracking your way to giving generously, saving wisely, and living appropriately.

We HIGHLY recommend you check out what Art Reiner has put together. We followed Dave Ramsey’s baby steps, but in hindsight, we wish we would have had the 8 Money Milestones instead.

Now, onto the budget. Since it can be difficult to determine the difference between a want and a need, we like to break things down into more categories. You can scour the internet for recommended percentages (or even better, speak with a financial planner), but below is what we’ve found to be general recommendations.

Side note on wants v. needs: This can get a bit confusing, but you have to be really honest with yourself. If you’re struggling financially, a need is something you CAN’T live without (food and shelter). A want is something you CAN live without (Starbucks, a brand new car, eating out). Don’t make excuses. Excuses will keep you right where you are instead of moving you into a better future.


Here’s what the percentages equate to in actual dollars for a household with a post-tax income of $5,000/month.

Monthly Take Home Pay$ 5,000

You’ll notice that debt is at 0%. That doesn’t mean we think you should put 0% of your income towards debt reduction. It just means that you should start by reining in your other percentages. If you’re significantly over in one category, say in housing, you may want to consider how to reduce your spending. (i.e. refinancing or renegotiating your rental agreement).

Remember those goals we told you to write down in last week’s blog? Well, if making an extra student loan payment each month is a goal for you, figure out how much money that is as a percentage of your income. If it’s 2% then you’ll move your debt percentage up to 2% and figure out how you can cut spending in another category or two. Does that make sense?

Example: Debt percentage goes up to 2% and recreation moves down from 5% to 3%.

You get to play around with your percentages. The main thing you have to remember is, when you add up your percentages they HAVE to add up to 100%. When you add up your actual spending, it CAN’T be more than you make. If it is, you have to cut spending and/or make more money. Otherwise, your debt will continue to grow.

The reason we prefer this method over the 50-30-20 method is because everyone’s life, income, and goals are different. This method takes more work on your part, but ultimately it’ll be more effective in helping you get to where you want to be.


You may not believe this, especially if you’ve never met us in person, but we truly want to help you. We aren’t certified financial planners. Our recommendations should never be taken as a substitute for professional advice and guidance, but we’ll be your biggest cheerleaders. We’d love for you to reach out to us if you’re confused or conflicted about your finances, especially if you need guidance regarding the behavioral aspect of money management.

We know what it’s like to spend more than you make. We know what it’s like to want something different for your finances, while your friends and family think you’re a little crazy. We understand what it’s like to look back with regret, but we also know that doing something different today is better than digging your head in the sand. Your financial future is bright. We truly believe that, and we believe in you!

Because there’s a better way,
Sarah (and Trent)

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