50/30/20 Rule | Budgeting & Saving Lesson

A lesson for students on how to manage their money with the 50/30/20 rule, a simple strategy for budgeting that balances needs, wants, and savings. Discover practical tips for managing income, reducing expenses, and building a secure financial future.

Students learn to divide their after-tax income into three categories: Needs, Wants, and Savings. They will understand the importance of allocating 50% of their income to essential needs like rent, utilities, and transportation, and learn the significance of distinguishing these from wants. The lesson also covers how to enjoy life by responsibly spending 30% on wants such as entertainment and personal luxuries while maintaining financial discipline. Furthermore, the guide emphasizes the crucial role of dedicating 20% of income to savings and debt repayment, including building an emergency fund and contributing to retirement accounts. It offers practical tips for monitoring spending habits, finding creative solutions to reduce expenses, and highlights the importance of starting small with savings. This approach is adaptable to different financial situations, encouraging a balance that ensures comfortable living and a secure financial future.


Use this video lesson on the topic of money management. Learn related concepts of:

  • Budgeting
  • Savings
  • Debt Management
  • Income Allocation
  • Earning Income
  • Buying Goods
  • Financial Investing
  • Risk Management


7-12th grades. High School. College. Adult Education.


45-60 minutes. Adjust the lesson plan and allocate time to certain topics based on the needs and interests of the students.


Hand out the worksheet below (see the GET LESSON button near the bottom of the page).

Show students the video and have them complete the worksheet.  Review the questions on the worksheet.  A more comprehensive and detailed lesson plan can be accessed below for further instruction and study.

50/30/20 Rule | Budgeting & Saving

After watching the video, have students tell what the most important things they learned from the video.


Lesson Plan: Mastering Money Management with the 50/30/20 Rule

Objective: To understand and apply the 50/30/20 rule for effective budgeting and financial management.


  • Begin with a brief introduction to the 50/30/20 rule.
  • Explain the importance of budgeting and financial planning.

Video Viewing:

  • Show the video titled “50/30/20 Rule”.
  • Encourage students to take notes for the quiz later.

Discussion Questions:

  • What are the three categories of the 50/30/20 rule?
  • Why is it important to distinguish between needs and wants?
  • How can one manage if their needs exceed 50% of their income?
  • Discuss the importance of savings and how to start, even with small amounts.
  • How can this rule be adapted to different financial situations?

Group Activity:

  • Divide students into small groups.
  • Each group creates a monthly budget for a hypothetical scenario using the 50/30/20 rule.
  • Groups present their budget plans and discuss challenges and solutions.

Individual Activity:

  • Students draft a personal budget plan using the 50/30/20 rule.
  • Encourage them to consider their actual income and expenses.


  • Conduct a quiz based on the video and lesson content.
  • Includes questions about budgeting concepts, the rule’s categories, and practical applications.


  • Summarize key takeaways from the lesson.
  • Emphasize the importance of regular financial planning and budget review.

Further Reading/Resources:

  • Provide a list of resources for additional learning on budgeting and financial management.

Lesson Resources

Get Lesson


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