You might choose to break down your expenses even further, between things you need to have and things you want to have. For instance, if you drive to work every day, gasoline probably counts as a need. A monthly music subscription, however, may count as a want. This difference becomes important when it’s time to make adjustments.
An Example of the 50ቺተ Plan. Let's say your total take_home pay each month is ū귔. Using the 50┺┰ rule, you can spend no more than ũ껎 on your needs per month. You probably can't afford a ũ귔_a_month rent or mortgage payment, at least not unless your utilities, car payment, minimum credit card payments, insurance premiums, and other necessities of life don't exceed 趚 a month.