Definition
A simple budget framework that splits take-home pay into 50% needs, 30% wants, and 20% savings and extra debt payments. Popular as a starting point because three buckets are easy to maintain.
Why it matters
Most budgets die of complexity. Three buckets are coarse enough to maintain for years and precise enough to expose the real problem, which is usually needs swallowing more than half of income.
Example
On $5,000 of monthly take-home pay, the split is $2,500 for needs, $1,500 for wants, and $1,000 for savings and extra debt payments. If rent pushes needs past $2,500, the other buckets shrink deliberately instead of by accident.
Put it into practice
Related terms
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