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The essential skill that's also an indicator of your ability to successfully navigate through life.

How to Budget Like A Badass

(Psst: It's not the amount, it’s the percentage that counts)

When it comes to the financial foundation that makes everything in life possible, the two numbers you must know are;

  • how much income you take home each month? and
  • how much are you spending each month?

Perhaps it's time to move beyond the traditional views of a budget tracking every expenditure (because we know you're not going to do it and we don't either).

And this is why ...

Read in this article:

Put simply, we all need to spend less than we earn and have a plan about how we achieve that.

This is what we call a budget and it's really just you telling your money what you want it to do for you. How you use your budget is an indication of what's important to you and where you want to go in life.

As families we have a spending problem, and we have an expectation problem.

A new way of budgeting

If you're not familiar with the art of better managing your money, why not consider if a percentage-based budget system can become a powerful habit-forming helper.

The power is in the percentage

badass image

This percentage-based budget system splits all your spending into just one of three categories;




As your goals and financial needs change over time, you can change the spending percentages you allocate to your Wants, Needs and Savings.

What's included in the three categories?

  • Wants are the things you buy for personal happiness like gym memberships, Netflix, broadband, dining out and Friday night drinks with your mates after work.
  • Needs are essentials that include mortgage repayments, rent, utilities like power and water, food, healthcare and the usual household requirements. (A need could be further described as something that if not paid would bring legal action, the loss of a job or a significant sickness or injury).
  • Savings is the amount you put aside for your future. Savings help build your emergency savings fund and includes investing for the future, any extra contributions you might make to your super fund, additional payments to an investment property or even a future education savings plan for your kids

Fuzzy logic, Sushi and Breakfast with smashed avo

No conversation about wants –v– needs would be complete without a look at whether 'Sushi' is considered a need or a want?

  • Food is both a want and a need, so it requires honest thinking on your behalf (and maybe a straightforward conversation with your spouse) about how each of you defines wants and needs.

It's your life so you get to make the rules, but if you’re not going to be honest with yourself, it's a hard life ahead.

So what's on your list of needs and wants?

How many times you eat out is an indication of how many wants you can fit into one month. Now don't get me wrong, a meal out is a great want (especially if it includes Sushi or Korean cuisine).

But you can't call eating out a need.

If you do, that's a deep rabbit hole that leads to a hard life ahead.

The two types of food categories are;

Regular food

Luxury food

You get that.

When you're attempting to negotiate under pressure with your screaming four-year-old, whose hand is locked in a death grip on a rogue chocolate bar while you're standing in line at the slow-moving checkout, and you hear the words, “but I neeeed ittt ....” the distinction between need and want is abundantly clear.

Learn to budget like a badass with the 50-30-20 approach


The 50-30-20% approach divides all your spending into just one of three categories and then sets a maximum spending percentage for each category.

  • All you have to do is keep your spending under the set percentages and good budgeting becomes an automatic habit.

How it works with a real income

If your monthly take-home income is $3,000 per month, using the example of the 50-30-20% budget, your spending plan would be;

  • 50% of your take-home income for Needs (or up to $1,500)
  • 30% of your take-home income for Wants (or up to $900)
  • 20% of your take-home income for Savings (or up to $600)

How to start your 50-30-20 budget

  1. First, work out what your monthly take-home-pay is (the after tax in-your-pocket amount).
  2. Then divide your spending into the three main categories of Needs, Wants, and Savings.
  3. Next, track your expenditure for the first month and allocate it into one of each of these three categories.
  4. Now adjust your spending so you don't overspend in either of the three categories.

At the end of the month, if you see you've been overspending on stuff you want but don't really need, you’ll have to hold yourself accountable to the percentages you've set for your budget.

Why does it work?

  • Simplifying your personal finances into 3 main categories means you get a better understanding of your needs, wants and the future.
  • Being more intentional about where you put your money and why is a great way to learn a new skill.
  • Simple plans usually have a higher chance of success.

Clients tell us using this percentage approach to their family budget has freed up a lot of their time and reduced the arguments with their partners over money matters.

Change your percentages as you need

The one constant in life is change and life never quite works out the way you planned. As your needs change tweak your budget percentages.

If you want to save a deposit for a home or to afford an overseas holiday with the whole family, switching your budget to an alternative set of percentages for a time, can help you achieve your goals.

The only barrier to becoming a master of the percentage budgeting technique is your ability to separate what's a Need and what's a Want.

100% Badass

badass iconFor your percentage-based budget to be recognised as truly badass, there must be an amount set aside to save for future needs, emergencies, and future plans.

Why is this rated badass I hear you ask?

Simple: It takes significant effort and self-control to live a little less today, so you have a backup plan and a future you can afford tomorrow.

5 Variations to the Wants, Needs & Savings budget percentages

The ability to master delayed gratification is a key indicator of a person's ability to successfully navigate their financial life.

The 80-20-0 Teenagers Budget


The 80-20-0 Teenagers Budget

  • Key feature:        Usually a problem waiting to happen
  • Key strength:      If you want the biggest home possible, this budget is the one for you
  • Key weakness:   You're only ever 3 missed mortgage repayments away from foreclosure with no backup savings

If you find yourself living on this budgeting knife edge for any great length of time, you know you’re just one emergency dental bill away from a world of pain: the future is frightening.

If you want the biggest home possible, this budget is the one for you.

It provides a significant allocation of your income to ‘needs’ and removes the stress of saving for emergencies and planning for your future. So if a big house is close to your needs, enjoy this now and try to pay off the mortgage asap because you probably won't be able to afford to retire.

Be sure you don't upset your boss at work because you'll need the highest level of job security you can.

Danger sign:  Without an emergency savings fund and without any form of an emergency backup plan, you need to remember your mortgage is only ever 3 missed mortgage repayments away from a foreclosure.

If you find this is your default go-to percentage for your current family budget, go back and have a serious wants v needs talk with yourself.

Need Help? If find yourself @ 80-20-0 for an extended period of time, click here

The 60-40-0 McMansion Budget

The 60-40-0 McMansion* Budget


  • Key feature:       High on wants and needs,  zero thought to savings
  • Key strength:     Well?
  • Key weakness:  Relies upon spending habits formed as a teenager

Teenagers often use this budget percentage when they live at home with the folks, life looks good and the future is only somewhere just past the next weekend.

Why is this a problem?

Spending habits formed as a teenager don't usually work well for us as an adult.

Over time people become comfortable with the habit of living week to week and spending everything they could but then forget to change the approach (and haven't learned different skills) when they move out on their own or begin to partner up.

Pro Tip: These people have usually signed up for multiple pay-TV packages and gym memberships (because they were convenient to work and home).  If you’re a geek you might have half a dozen direct debits for ‘software as a service' packages and if you're a fashionista, fast moving fashion is your weakness. Your bank and credit card statements are usually pages of small recurring monthly transactions you'd struggle to explain; but you know they’re all needed, for something.

How do you upgrade from this approach?

People using this 60-40-0 budget might need to go back and have the wants -v- needs conversation with themselves again. Simply spending their money to get whatever they want, has become such an ingrained habit they begin to feel their wants, are actually needs.

When it comes to being able to recover from the normal ups and downs in their financial life, the smallest financial strains have the power to completely derail them, because there are no backup or emergency funds.

(*biggest house on the smallest block of land)

The 30-10-60 Boss Badass Budget


The 30-10-60 Boss Badass Budget

  • Key feature:       Rapid goal achievement
  • Key strength:     Accelerating self-worth
  • Key weakness:  Spartans had more luxuries than you

There's a reason this budget is considered Boss Badass.

Allocating 60% of income to a big savings goal or just retirement will significantly accelerate your success.

The sooner you can commence this level of badass budgeting the faster you’re financially free.

When it comes to needed stability of employment, when rocking this budget, you could afford to have a few strong words to the boss and even push back on any unreasonable demands. You're in a strong position because you'll have backup savings that could let you take a few months off work to find a replacement job if needed.

People who have just finished paying down their major housing debts and who still have the ability to ‘continue to save at that level’, become the masters of their own destiny faster.

The only step up from this budget percentage is the hardcore savers using the 20-10-70 allocation.

The 20-10-70 Master Badass


The 20-10-70 Master Badass

  • Key feature:      Fastest savings
  • Key strength:   Great if you have paid off your mortgage
  • Key weakness: Life can start to feel bland if you let it

This is the ultimate savings master. These are the people who are going off the grid, starting their own businesses, or planning to go all William Wallace at any price and see financial freedom as the only imperative.

When it comes to their employment, these people could quite possibly stop work for a year if they wanted to, or if the boss annoyed them perhaps even buy the company and sack the boss. These serious hardcore budget masters are focused, deliberate, and committed to achieving their outcomes.


The last word

100% Badass Icon

It's your money, so you get to make the rules

  • The percentage-based budget simply helps you see what the future may hold based on your current spending habits.
  • When you need to adjust your financial priorities, like saving a deposit for a house, planning a wedding, or even saving to take the kids on that trip to Disneyland you accidentally promised them in a fit of last resort begging to get them to stop their last public tantrum in the grocery store, (ok - it happened to a friend of mine), you can simply adjust your percentage allocations as you need to achieve a particular goal.

Once you understand how to see past the numbers and work the power of the percentages, you’ll start to see where a person's spending habits will probably take them.

Perhaps it's time to learn how to budget like a badass. How far down you push the accelerator - is up to you.

Download our free Badass Badass Infographic. Click HERE

Download our free Badass Budget Spreadsheet. Click HERE

author pic drew browneDrew Browne is a specialty Financial Risk Advisor working with Small Business Owners & their Families, Dual Income Professional Couples, and diverse families. He's an award-winning writer, speaker, financial adviser and business strategy mentor. His business Sapience Financial Group is committed to using business solutions for good in the community. In 2015 he was certified as a B Corp., and in 2017 was recognised in the inaugural Australian National Businesses of Tomorrow Awards. Today he advises Small Business Owners and their families, on how to protect themselves, from their businesses.  He writes for successful Small Business Owners and Industry publications. You can read his Modern Small Business Leadership Blog here. You can connect with him on LinkedIn Any information provided is general advice only and we have not considered your personal circumstances. Before making any decision on the basis of this advice you should consider if the advice is appropriate for you based on your particular circumstance.

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