Achieving financial freedom is possible—and it doesn’t have to take forever. A solid budgeting strategy can set you on the right path, and one of the simplest yet most effective methods is the 50/30/20 rule. This structured approach helps you navigate your finances with ease, making financial stability more attainable in less time.
Meet the Okes—a typical Saskatoon family of four. Dave works at a local tech company, while Sarah manages a small bakery downtown. The couple have two kids, Emma and Liam, who are always begging for the latest toys or gadgets. Life is busy, and money seems to slip through their fingers faster than they can earn it.
Sound familiar?
Yes!
One evening, after another month of feeling like they were just treading water financially, Dave and Sarah decided enough was enough. They needed a plan—a simple, foolproof way to manage their money without feeling overwhelmed. It was going to be a tough decision, but the family’s financial future depended on it, hence it was worth going for. That’s when they discovered the 50/30/20 Rule, the budgeting hack that changed their financial lives.
What is the 50/30/20 Rule?
The 50/30/20 Rule is a straightforward way to divide your after-tax income into three categories: 50% for Needs (essential expenses like rent, groceries, utilities, and transportation, 30% for Wants (fun stuff like dining out, hobbies, and entertainment), and 20% for Savings and Debt Repayment (building your emergency fund, saving for retirement, or paying off loans). It’s not about cutting out all the fun or pinching every penny—it’s about balance. And for the Okes, it was exactly what they needed.
The Okes’ Meritorious Example
First, the couple sat down and calculated their monthly after-tax income. Let’s say it’s $6,000. Here’s how they broke it down:
50% for Needs ($3,000):
– Mortgage: $1,500
– Groceries: $800
– Utilities: $300
– Car payments and gas: $400
This left them with $3,000 for everything else.
30% for Wants ($1,800):
– Family outings (like trips to the Saskatoon Forestry Farm or dinner at Hearth): $500
– Sarah’s monthly yoga classes: $100
– Dave’s video game habit: $100
– Miscellaneous fun: $1,100
Yes, they still got to enjoy life—just within a set limit.
20% for Savings and Debt ($1,200):
– Emergency fund: $500
– RRSP contributions: $400
– Paying off their credit card: $300
This was the game-changer. For the first time, they were consistently saving and chipping away at debt.
A Game-changer for Saskatoon Families
The 50/30/20 Rule is perfect for families like the Okes because it’s flexible and realistic. Saskatoon’s cost of living is manageable compared to bigger cities like Ontario, Vancouver, and Calgary, still, it’s easy to overspend if you’re not careful. This rule helps you prioritize what matters most while still leaving room for the little joys like grabbing a coffee from City Perks or taking the kids to the Nutrien Playland at Kinsmen Park.
Tips to Get Going and Never Turn Back
1. Track Your Spending: Use apps like Mint or YNAB to see where your money is going.
2. Adjust as Needed: If your “needs” exceed 50%, trim your “wants” or find ways to cut costs.
3. Automate Savings: Set up automatic transfers to your savings account so you don’t even have to think about it.
See You and Your Family in Six Months
Fast forward six months, and you should be thriving. You would have built a solid emergency fund, paid off a chunk of your credit card debt, and still be enjoying your favorite Saskatoon activities. Possibly you’ve even started saving for a family vacation to Banff.Â
The 50/30/20 Rule isn’t just a budgeting hack—it’s a lifestyle shift. It’s about taking control of your money so you can live the life you want, right here in Saskatoon.
