Forget 50-30-20 — Teach Your Kids the 20-50-30 Rule for Saving Success
Jun 30, 2025
If you want your kids to grow up financially confident, teaching them to save should be right at the top of your parenting list. Forget the fancy charts and complicated advice. The idea is simple: help them build the habit of paying themselves first.
You’ve probably heard of the famous 50-30-20 rule. It goes like this: 50% of your money for needs, 30% for wants, and 20% for saving. Sounds good, right? Wrong. The experts have been getting this backwards for years. Let’s flip it on its head and call it what it should be: 20-50-30.
Why? Because saving shouldn’t come last. It should come first. Before the bills, before the fun stuff, before anything else. That’s the habit that will actually stick. When kids get into the rhythm of saving right away, they don’t see it as optional. It’s just what you do.
So how do you get this into their heads without sounding like a broken record? Make it part of daily life. Saving doesn’t have to be a boring lecture. Here’s how to make it real:
- Give them real money to manage. Even a few bucks of allowance gives kids the chance to decide: how much do I save, how much do I spend?
- Set up small goals. Want that new toy or game? Cool. Let’s figure out how much needs to go into savings each week to make it happen.
- Show them where the money goes. Open a savings account with them. Let them see the balance grow. It’s way more motivating than numbers on a piece of paper.
And don’t stress about perfection. The goal is to build a mindset where saving isn’t the thing they do if there’s anything left over. It’s the thing they do first. Every time.
This is where parenting meets real life. Our job isn’t just to tell kids saving is important. It’s to show them that saving is part of who they are. And once that habit is locked in, they’ll carry it with them no matter how much they’re earning.
So, next time someone tells you about the 50-30-20 rule, you can smile and say, “Nah. In our house, it’s 20-50-30.” Because around here, saving isn’t what’s left over. It’s where we start.
