Budget rules: 70/20/10, 60/20/20, 40/30/20/10 and 28/36
Each rule in plain words, what its parts are, who says it, and what it comes to on $6,000 a month. Then a calculator for your own pay.
Checked October 22, 2026
Try a rule on your own pay
Type your take-home pay for a month and pick a rule. Each part comes out in dollars.
Take-home is what lands in the bank after tax. Nothing you type here leaves this page.
- Spending70%$4,200
- Saving20%$1,200
- Extra debt or giving10%$600
Spending covers needs and wants together.
The 70/20/10 rule and 70/20/10 budget
This one has three parts, all out of take-home pay. Chase describes them like this:
- 70% for spending. Fixed costs like rent and utilities, variable costs like groceries and meals out, and minimum debt payments.
- 20% for saving. An emergency fund, a down payment, a retirement plan.
- 10% for extra debt or giving. Extra payments on debts like student loans or medical bills, or donations.
Who publishes it: no one we could find. The page we read credits no author for the rule, so treat it as a common rule of thumb with no single source. Because needs and wants share the 70%, the rule does not tell you how much of it is must-have.
| Part | Share | On $6,000 a month |
|---|---|---|
| Spending | 70% | $4,200 |
| Saving | 20% | $1,200 |
| Extra debt or giving | 10% | $600 |
The 60/20/20 rule and 60/20/20 budget
The Penny Hoarder describes the 60/20/20 rule as three parts of monthly take-home pay:
- 60% for needs. Rent or mortgage, utilities, basic groceries, transportation, insurance, child care and minimum debt payments.
- 20% for savings or debt. Savings goals, or extra payments on debt.
- 20% for wants. Dining out, streaming, travel.
Who publishes it: that page names no creator either, so this too is a common rule of thumb with no single source.
| Part | Share | On $6,000 a month |
|---|---|---|
| Needs | 60% | $3,600 |
| Savings or debt | 20% | $1,200 |
| Wants | 20% | $1,200 |
The 40/30/20/10 rule
WalletHub describes four parts of after-tax income. Needs are 40% (rent or mortgage, utilities, fuel, groceries) and wants are 30% (travel, dining out, streaming). Savings and debt are 20%, which holds retirement and home savings, a cushion, and loan and credit card payments. The last 10% is for giving and other goals. The page names no originator, so this is another rule of thumb.
| Part | Share | On $6,000 a month |
|---|---|---|
| Needs | 40% | $2,400 |
| Wants | 30% | $1,800 |
| Savings and debt | 20% | $1,200 |
| Giving and other goals | 10% | $600 |
What is the 28/36 rule?
It is not a way to split a paycheck. It is a guideline for how much housing and debt a household carries, and it is measured on gross income, which is pay before tax. The CFPB defines a debt-to-income ratio as all your monthly debt payments divided by your gross monthly income. Its toolkit for social service programs gives the two numbers: for homeowners, a ratio of 28% to 35% or less for just the mortgage, taxes and insurance, and 36% or less for all debts. It also says these are guidelines, not rules, and that different loan products and lenders have different limits.
| Measure | Limit | On $6,000 a month before tax |
|---|---|---|
| Mortgage, taxes and insurance | 28% | $1,680 |
| All debts together | 36% | $2,160 |
For two people, you can run the numbers on your two gross incomes added together, or each of you on your own.
The 20/4/10 rule for car buying
Another rule that looks like a split but is not. Chase describes it as three limits on a car: a 20% down payment, a loan of 4 years or less, and car costs of no more than 10% of your monthly gross pay. The 10% covers the payment, insurance, maintenance and fuel together. Chase credits it to no author.
| Part | Limit | Example |
|---|---|---|
| Down payment | 20% of the price | $6,000 down on a $30,000 car |
| Loan length | 4 years or less | 48 months |
| All car costs | 10% of gross pay | $600 a month on $6,000 before tax |
Two published plans to compare
The rules above are rules of thumb. These two have an author and a page you can read.
| Plan | Part | Share | On $6,000 take-home |
|---|---|---|---|
| Fidelity, Plan Your Pay (January 2026) | Needs, no more than | 60% of take-home | $3,600 |
| Wants | 30% of take-home | $1,800 | |
| Near-term goals and emergency savings | 10% of take-home | $600 | |
| Retirement, on top | 15% of pay before tax, match included | Depends on your gross pay | |
| Ramit Sethi, Conscious Spending Plan | Fixed costs | 50 to 60% of take-home | $3,000 to $3,600 |
| Investments | About 10% of take-home | $600 | |
| Savings | 5 to 10% of income | $300 to $600 | |
| Guilt-free spending | 20 to 35% of take-home | $1,200 to $2,100 |
Both put needs at about 60% or less and both keep a part of your pay for fun. Where they differ is that Fidelity measures retirement on your pay before tax, and Sethi counts it as part of take-home.
Two more rules of thumb
- The 30% rent rule: how much of your income goes to rent.
- The rule of 72: how long money takes to double at a given rate.
Which one fits a couple?
The rules do not say how two people should share one. A few ways to use them: each of you applies the rule to your own take-home pay and pays your part of shared costs from it, or you add both pays together and treat the household as one. If your pays differ a lot, a split by income keeps the same share of each pay going to shared bills. The guides on budgeting for couples and budget categories go further, and the paycheck saving tool looks at the saving part alone.
If your needs do not fit the rule you picked, that is useful to know, not a failure. It may mean the rule does not match where you live.
Questions people ask
What is the 70/20/10 rule?
A way to split take-home pay: 70% for spending (needs and wants together), 20% for saving and investing, and 10% for extra debt payments or giving. Chase describes it this way. No single author is credited on the pages we read.
What is the 60/20/20 rule?
A split of take-home pay into 60% for needs, 20% for savings or paying down debt, and 20% for wants. The Penny Hoarder gives the example of $4,000 a month: $2,400, $800 and $800.
What is the 40/30/20/10 rule?
Four parts of after-tax pay: 40% for needs, 30% for wants, 20% for savings and debt, and 10% for giving and other goals. WalletHub describes it this way.
What is the 28/36 rule?
A lending guideline, not a budget split. It is measured on your pay before tax: housing costs at about 28%, and all debts together at about 36%. The CFPB's toolkit gives 28% to 35% for the mortgage, taxes and insurance, and 36% or less for all debts, and calls such ranges guidelines.
What is the 20/4/10 rule for buying a car?
Put 20% down, take a loan of 4 years or less, and keep all car costs (payment, insurance, maintenance, fuel) to 10% of your monthly pay before tax. Chase describes it this way.
Is a budget rule based on gross or take-home pay?
The spending splits on this page (70/20/10, 60/20/20, 40/30/20/10 and Fidelity's 60/30/10) use take-home pay. The 28/36 and 20/4/10 rules use pay before tax. Check which one a rule means before you do the math.
Sources
8 sources · read October 22, 2026
Every number on this page comes from chase.com, thepennyhoarder.com, wallethub.com and 4 more. If a source has changed since, the source is right.
- 1Chase: What is the 70-20-10 budget rule?chase.com
- 2The Penny Hoarder: The 60/20/20 Budget Rulethepennyhoarder.com
- 3WalletHub: What Is the 40/30/20/10 Rule?wallethub.com
- 4CFPB: Your Money, Your Goals, dealing with debt (the 28% to 35% and 36% debt-to-income figures)files.consumerfinance.gov
- 5CFPB: What is a debt-to-income ratio?consumerfinance.gov
Wonderful gives general information. It isn't a financial or tax advisor.