The 50/30/20 lifestyle: a way to save each pay


A 5 minute read (well worth your time).

We understand that after waiting for your payslip, when that cash hits your account, it’s only human for spend-rationality to temporarily disappear.

Before you can even mumble the word retirement, you’ve taken yourself out for breakfast, clicked seventeen buy-now buttons and are walking back to work with a round of coffees on you. We get that there is a lot to spend your money on and a lot going on.

But with a little focus and planning upfront, it’s super simple to automate where your income lands each pay to set yourself up for seamless financial success.

At Child Care Super, we love what’s often referred to as the 50/30/20 rule so much that we don’t call it a rule - like anything that’s trending on Instagram, we call it a lifestyle.

By following this 50/30/20 lifestyle, 50% of your income will go towards essential life stuff, like rent and groceries, 20% will go into your savings (we’ll break this down further a little later), and the remaining 30% - THIRTY PERCENT is yours to do whatever you’d like with, whenever you like

Assuming that 100% of each pay goes into one single account, let’s examine how each part of the 50/30/20 lifestyle works:

50% of your pay - Everyday Necessities

Generally speaking, half of your pay goes on the necessities. Things such as the groceries, the bills, the rent or mortgage, regular payments etc.

50% of your income should be dedicated to covering these costs, and should live in and be extracted from an account of its own.

Bonus: if there is enough left over, include any subscription services you pay for consistently each month, like gym fees, Netflix or Spotify; otherwise if you’re running a tight financial ship, this additional nice-to-have stuff can be covered by the 30% chunk of your pay (see below). This pool is also where you might take advantage of  SUPERSUPER the shop-and-save rewards program that is available exclusively to members of  Child Care Super.

30% of your income - Anyday Wants

Is there a movie you want to see? See it! New top you’ve been lusting after? Get it! Getting interested in investing? Start playing! Obsessed with collecting Pokémon cards from the early 90’s? Get bidding! This part of your income will live in your spend account, and can be spent on fulfilling your heart’s more immediate desires. And, because you’ve already considered and looked after the other life stuff, this part of your paycheck is where the phrase ‘guilt-free’ is very, very relevant.

The 50/30/20 rule (‘lifestyle’) enables you to enjoy your money, because it works for you and with you at every step of the way. In terms of set up, it’s easiest for those who get paid a regular salary, but it’s also an easy rule for freelancers and contractors to apply to their income - it may just take a little more manual tinkering each pay.

With just a bit of effort up front, you can be on your way to near-future, mid-term future and distant-future bliss, without having to spend time stressing about your spending-life along the way - and at Child Care Super, we think that’s truly super.

20% of your pay - The Glorious Future

This is where automation gets interesting, and, dare we say, super savvy.

For example, 5% of this chunk could go into your superannuation fund, no questions, no hesitation. Pretend like this 5% doesn’t even exist - just set it up and let that cash sail into the future, ready to hug you like an old friend when you hit retirement. If your employer already contributes to your superannuation fund, consider this splash of investment-cash an extra dose of self-care.

Generally speaking, 10% of this 20% may then go into an account that’s reserved for those unexpected but guaranteed life expenses - the dental bills, the new tyres, clothing repairs. When you’ve got some money put aside for these surprises, it makes the process that much less painful.

Then the remaining 5% of this 20% chunk should go into your own longer term savings account, which might be reserved for bigger life events like putting a downpayment on a house, planning for a wedding or taking a well-deserved holiday. Check in with your current life goals and see what’s on the horizon. With your eye on the prize, it’ll be exciting to watch the numbers on your savings account increase.

(Note: If you have debt, like a student loan, you can also tailor this part to direct some extra cash each pay towards paying this debt off)

Automated payment set-ups do vary between bank to bank, but are generally simple and free to set up. Have questions or feedback about this article? Don’t hesitate to get in touch with us 1800 060 215 .