Give every dollar a job.
The story so far You just started full-time at a bike shop for $18 an hour. After taxes (that's Unit 2), $2,400 lands in your bank account every month. Rent is $900. So where does the rest go?
Split your take-home pay into planned jobs before you spend any of it.
Without a plan, surprises go on a credit card at 20%+ interest.
Use 50/30/20 as a target, then zero-based budgeting to plan every dollar.
Financial planners do this for clients. FP&A analysts do it for whole companies.
What you're looking at: a sketch of one $2,400 paycheck splitting into three streams with the 50/30/20 rule: $1,200 for needs, $720 for wants and $480 for savings. Each stream's width matches its share.
Drag your paycheck.
Watch it split.
Rent, groceries, transport, insurance, minimum debt payments
Eating out, games, concerts, new clothes, upgrades
Emergency fund, investing, paying off debt faster
What you're looking at: the 50/30/20 rule as one bar. The slider sets your monthly take-home pay, from $1,000 to $8,000. The bar always splits 50% needs, 30% wants and 20% savings, and the three numbers below show those shares in dollars.
One hundred coins. Each one is 1% of your paycheck.
Zero-based budgeting means no empty coins left over. Hand them out.
100 coins with no job yet.
What you're looking at: your paycheck as 100 coins, so each coin is 1% of it. Each button gives 5 coins a job: blue for needs, orange for wants, green for savings. Empty coins still have no job. Zero-based budgeting means you finish with no empty coins left.
Two minutes. Just listen.
Tap any line to jump to it.
Month Survivor
Plan your $2,400, then live through a month. Life will throw things at you. Finish without touching the credit card if you can.
What you're looking at: the game board: your town for one month, with you in the middle and the places your money goes around you. The strip below it counts the four weeks.
The logic, step by step.
The 50/30/20 rule
In words: take your take-home pay (what actually lands in your account after taxes) and split it three ways. Half goes to needs, the things you must pay to live and work. 30% goes to wants. 20% goes to savings and paying off debt faster.
Wants = 0.30 × take-home pay
Savings = 0.20 × take-home pay
Why 50/30/20 is a rule of thumb, not a law
A rule of thumb (economists say heuristic) is good enough most of the time. This one was popularized by Elizabeth Warren and Amelia Warren Tyagi in All Your Worth (2005). It ignores location: in expensive cities, needs often run 60% or more. It also ignores goals: if you're paying off a 24% credit card, push "savings" well above 20%, because paying off 24% debt is a guaranteed 24% return.
In a college finance class this connects to opportunity cost (every dollar spent on a want is a dollar not compounding) and liquidity (an emergency fund is cash you can reach right away without selling investments at a bad time).
Zero-based budgeting
In words: before the month starts, give every dollar of your take-home pay a job. Subtract every planned category, and you should land on exactly $0. That doesn't mean you spend it all, because savings is a category too.
Worked example: $2,400 take-home
- Find the targets. Needs 0.50 × 2,400 = $1,200. Wants 0.30 × 2,400 = $720. Savings 0.20 × 2,400 = $480.
- List fixed needs first. Rent $900, phone $50, transport $120, groceries $280. That's $1,350, which is $150 over the target. That's normal when rent is high.
- Take the overage from wants, not savings. Wants drop from $720 to $570. Savings stay at $480.
- Split savings by priority. Emergency fund first ($330), investing second ($150), until you have about 3 months of needs saved.
- Check the zero. 2,400 − (1,350 + 570 + 480) = 0. Every dollar has a job.
Your budget is a watershed.
Your paycheck is rain. It splits into streams, and the savings stream fills a reservoir. When a drought hits (a surprise bill), towns with a full reservoir are fine. Towns without one go thirsty, or buy water at a terrible price.
What you're looking at: an illustration, not data. Rain (your paycheck) becomes a river that splits into a wide needs stream, a medium wants stream and a narrow savings stream. The savings stream fills a reservoir for dry months.
Why stream width matters. Rivers carve deeper channels where more water flows. Spending habits work the same way: the categories you feed most become the easiest places for money to keep going. A budget is you deciding where the channels get carved.
The page you'd copy down.
- Take-home pay (net pay) is what's left after taxes and deductions. Budgets start here.
- Needs: housing, groceries, getting to work, insurance, minimum debt payments.
- Wants: things that improve life but could be paused.
- Savings: emergency fund, investing, extra debt payments.
- 50/30/20 is a quick target. Adjust it for your city and goals.
- Zero-based: income − every planned category = $0. Savings counts as a category.
- Order: needs → minimum payments → starter emergency fund → high-interest debt → wants and investing.
Fill in the blanks
Grab a friend or a study group.
Roommate role-play
Two roommates split $1,800 rent and $150 utilities. One takes home $2,400, the other $3,600. One of you argues for 50/50, the other for splitting by income (40/60). Agree on one, then both build a 50/30/20 budget with it. Who ends up over their needs target?
Three-minute debate
"The 50/30/20 rule doesn't work in expensive cities." Take opposite sides and use real rent from a city you'd want to live in. Whoever changes the other person's mind with a number wins.
Survivor showdown
Both play Month Survivor and compare grades. Explain one choice you made differently and why. Teaching your reasoning to someone else is one of the fastest ways to lock it in.
Just you and your money.
These stay on this device. Nobody else sees them.
Exam-style questions.
Written the way a college exam would ask them. Each right answer on the first try is worth 10 xp.
On the job: you're the financial planner
Your client Jordan takes home $4,000 a month. Jordan spends $2,300 on needs (rent is $1,700), $1,400 on wants and $300 on savings, and has a $3,000 credit card balance at 24% APR.
Your task: compare Jordan to 50/30/20, name the biggest problem, and suggest a new split in dollars.
See a model answer
Targets: needs $2,000, wants $1,200, savings $800. Jordan is $300 over on needs, $200 over on wants and $500 under on savings.
Biggest problem: the 24% credit card. It costs about $60 a month in interest (3,000 × 0.2412), more than any savings account pays.
New split: needs stay $2,300 for now (the lease locks rent), wants drop to $900, and savings rise to $800: $600 to the card and $200 to a starter emergency fund. The card is gone in about 5 to 6 months, then that $600 moves to the emergency fund and investing.
This lesson is one stop on a longer road.
What you're looking at: a map of where this lesson fits in the course. Read it left to right: what comes before, this lesson in the middle, and the later lessons that build on it.
- Before · Unit 1Your first bank account
- Before · Unit 2Reading a pay stub
- You are hereBudgeting
- Next · Unit 3Emergency funds
- Later · Unit 4Credit and debt
- Later · Unit 5Investing
- Later · Units 11–12Company budgets