Did you know most Americans struggle to save money and stick to a budget?

You're not alone if managing your finances feels overwhelming—especially when you're juggling school drop-offs, work deadlines, and keeping the household running.

Enter the 70/20/10 budget, a simple yet powerful system that can help you take control of your money, set goals, and create breathing room in your finances.

In this article, we’ll break down the 70/20/10 budget in plain English, explain why it’s a fantastic fit for busy parents, and show you exactly how to make it work for your family.

What is the 70/20/10 Budget?

The 70/20/10 budget is a rule of thumb that divides your income into three categories:

70% for needs and wants

This includes all living expenses like housing, groceries, childcare, transportation, and discretionary spending (think: Netflix subscriptions or pizza nights).

20% for savings and investments

Allocate this chunk toward building your emergency fund, investing in a 401(k) or IRA, or setting aside money for big financial goals like buying a house or paying for college.

10% for debt repayment or charitable giving

Use this to pay down credit card balances, student loans, or make donations to causes close to your heart.

Think of this budget strategy like a well-balanced meal: 70% is your main dish, 20% is your salad (to keep you healthy long-term), and 10% is dessert—it’s sweet but purposeful.

Why It Works (Especially for Parents)

The brilliance of this system lies in its balance.

Too often, we focus solely on paying bills or trying to save without having a clear plan. The 70/20/10 framework ensures that you’re meeting your immediate needs, planning for the future, and tackling debt without feeling like you’re depriving yourself of life’s little joys—like that occasional drive-thru coffee or Friday pizza tradition.

#1: Simplicity is Key

Parents don’t need another complicated financial plan—we’ve got enough on our plates already. The 70/20/10 rule is straightforward, giving you a clear picture of where your money should go without diving into a million spreadsheets.

The 70/20/10 rule is designed to make budgeting intuitive and accessible.

Instead of spending hours sorting through receipts or complex spreadsheets, focus on allocating set percentages of your income right from the start.

By pre-determining your spending limits for each category, you can make informed decisions on the go, whether you're at the grocery store or planning a family outing.

#2: It Builds Stability and Flexibility

Whether you’re dealing with surprise school fees, unexpected medical bills, or saving for a family vacation, this budget lets you cover your bases while leaving room to adapt to life’s curveballs.

Unexpected expenses, like replacing a child's sneakers before basketball season, can be managed more easily when you have a flexible budget.

The 70% allocation for needs and wants provides built-in breathing room to handle such costs without jeopardizing your savings or relying on credit.

By anticipating potential surprises, you can stay prepared and maintain financial stability.

#3: It’s Scalable

Got a dual-income household? Great!

Bringing in a little side hustle money on the weekends? Even better.

The beauty of the 70/20/10 rule is that it’s adaptable, regardless of your income level.

As your financial situation evolves—whether through raises, bonuses, or side hustle earnings—this system scales with you.

For instance, if you start a side hustle to save for a big family trip, allocate the extra income strategically.

You might funnel 70% into trip-related expenses, 20% into an emergency fund (because life happens), and 10% toward any outstanding debt. This ensures that even unexpected windfalls contribute meaningfully to your goals without derailing your overall budget plan.

The key is consistency and aligning your spending with your priorities.

How to Get Started

2023 Census data reports average U.S. household income to be $80,610 per year. This breaks down to $6,717.50 per month. Using a 20% tax rate, this figure drops down to $5,374 per month.

Here’s and example of how you’d approach your budget using the 70/20/10 rule:

70% for Needs and Wants: $3,762
- Rent/Mortgage: $1,612
- Groceries: $860
- Utilities: $400
- Childcare: $650 (varies widely by state)
- Miscellaneous (subscriptions, outings, etc.): $240
20% for Savings and Investments: $1,075
- Emergency fund: $538
- Retirement contributions: $430
- College fund: $107
10% for Debt Repayment or Giving: $672
- Credit card debt: $537
- Charitable donations: $135

To get started, simply grab a pen and paper, or open a spreadsheet.

Write down your after-tax income and assign dollar amounts to each category based on the 70/20/10 rule.

Start by using the U.S. averages as a guide, then adjust based on your family’s unique expenses and priorities.

For example, childcare or college fund savings might need a larger allocation, which can be balanced by cutting back on discretionary spending or spreading other expenses over time.

The first step is seeing where your money is going—it’s like peeling back the curtain to reveal the financial wizard behind the scenes.

If you don’t want to start from scratch, I created an excel spreadsheet you can use.

Common Roadblocks and How to Overcome Them

Even with the best intentions, sticking to the 70/20/10 budget can feel challenging at times.

Many parents encounter common hurdles that might make the process seem daunting, but there are practical ways to navigate these roadblocks.

No problem.
Start where you are and aim to trim unnecessary expenses over time. Apps like YNAB (You Need a Budget) can help you track your spending and find areas to cut back.
If your grocery bill feels out of control, challenge yourself to shop sales or try meal prepping to save.
Redirect that 10% toward savings or an investment account instead.
The rule is adaptable to your goals—the important thing is to put every dollar to work.
If saving 20% feels out of reach, start smaller—say, 5%—and increase it as you can.
The important thing is to build the habit of prioritizing savings.

Tips for Sticking to the 70/20/10 Budget

Staying consistent with any budget requires effort, but the rewards are worth it.

By incorporating small but effective habits, you can make the 70/20/10 budget work seamlessly for your family.

Automate Your Savings: Set up direct deposits to funnel 20% of your paycheck into a savings or retirement account before you can spend it.
Get the Whole Family Involved: Talk to your kids about the budget. Use real-world examples, like comparing grocery prices, to show them how budgeting works.
Reward Yourself for Progress: Hit a savings goal? Celebrate with a family movie night or ice cream outing.

Why You Should Try It

Think of the 70/20/10 budget as a GPS for your finances. It helps you navigate unexpected expenses, plan for the future, and build habits that lead to financial freedom.

Parenting is stressful enough—money shouldn’t add to the chaos. By adopting this simple strategy, you can create a financial system that works for you, not against you.

Ready to take control of your money and give the 70/20/10 budget a try?

I'd love to hear about your experience, drop me a note at hello@knockedupmoney.com.

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70/20/10 Budget Explained: The Simple Financial Plan Every Parent Needs