How Much Money You Should SPEND (By EVERY AGE)

Here is how much you should spend by every age, the 50 / 30 / 20 budget rule, and the best strategies to save money and invest to build wealth – enjoy! Add me on Instagram: GPStephan

LIMITED TIME: Get 2 FREE STOCKS ON WEBULL when you deposit $100 (Valued up to $1400):



The YouTube Creator Academy:
Learn EXACTLY how to get your first 1000 subscribers on YouTube, rank videos on the front page of searches, grow your following, and turn that into another income source: $100 OFF WITH CODE 100OFF

My ENTIRE Camera and Recording Equipment:

Now, when it comes to SUCCESSFULLY managing your money and growing your wealth so you’re not living paycheck to paycheck, this is probably the most widely used RULE OF THUMB out there: It’s called the 50 / 30 / 20 Rule. You take your AFTER TAX INCOME and divide that income up as follows:

50% of your income should be spent on your NEEDS – or, in other words, things you absolutely HAVE TO HAVE.

30% of your income should be spent on your WANTS – these are things that you don’t NEED to have, but they’re NICE to have:

20% should be spent on savings, investing, debt repayment, and so on.

HOWEVER – here are my thoughts:

I personally believe the best budget and way to save money is using the 50 / 10 / 40 approach:

Most experts are quick to suggest that housing your housing payment shouldn’t exceed 1/3rd of your income. Although I’d MUCH rather suggest that you spend – AT MOST – 25% of your income on housing, and – if at all possible – aim to spend more like 20%, or as little as you possibly can.

The conventional wisdom is that your TOTAL cost of transpiration shouldn’t exceed 15% of your income, and the total PRICE you pay for a car shouldn’t exceed 35% of your annual salary. INSTEAD, I much prefer the DAVE RAMSEY approach when it comes to how much money to spend on transportation: He recommends that your transportation cost NOT EXCEED 10% of your annual income, you should ONLY buy USED cars until you have a net worth over $1 million dollars, and I would go so far as to say the value of the car you buy should be LESS than 25% of your annual income.

10% FOOD or $600/MO – whatever is less
That’s why I believe a 10% food budget is OKAY when that adds up to less than $500 per month…but, once you start making more money, your food budget doesn’t need to go up alongside your income.

5% Health Insurance
Health insurance can easily be 5% of your income…or, about $200-$500 per month for a single person depending on your age, location, and health insurance provider. It’s hard to put a “maximum amount” to spend here because you shouldn’t be cheap with your health…but, we’ll just round this off to 5% to be on the safe side.

3% Utilities – $500 or LESS
Generally, for most, you’re looking at around $50 – $250 per month – again, depending on your location and how hot or cold you like to keep your house. Or if you do laundry during off peak electrical hours.

I think it’s ABSOLUTELY reasonable that 10% of your income can be spent, without thinking about it, on whatever fun purchases you want to make, as long as this is budgeted for. It IS important that you have some money left over just to splurge, and spending 10% is just enough to “get it out of your system” without getting carried away.

The first thing I would do is save up a 6 month safety fund, in cash, held within a high interest savings account.

But once you’ve done that, your remaining savings should go towards maxing your your 401K up to your employer contribution limit.

After that, the next $6000 you invest should go towards maxing out your Roth IRA.

From there, any money you have left over should go towards a TAXABLE INVESTMENT account or some other type of investment that will grow over time.

At a 42% savings rate…you’d EASILY be able to retire in just about 20 years from the 4% rule like I mentioned earlier…meaning, if you start doing this NOW at 20 years old…by the time you’re 40…you will be nearly ready to retire, if you want to.

For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at

*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.


What do you think?


Leave a Reply
  1. My personal budget seems similar to this as it is a more aggressive saving/investing strategy. Currently, I use a 70/30 rule. Saving/investing 70% and the remaining 30% for needs and wants. Keep in mind I am a random person lol but would recommend if you can or dare.

  2. So when i was funded and on a stipend for my PhD, I was paid $2200 a month from the university, so based on graham's strategy (which isnt feasible for most low-income people like myself at that time), I should be paying $700 a month on rent. which in miami would get you a shed.

  3. After you max your roth, wouldn't it be a better idea to go back and fully max out your 401k instead of investing in taxable accounts? A 401k is tax-advantaged, after all…

  4. I used to spend hours trying on clothes nothing will fit me right i will buy something i hated just bc i need cloths to wear, i felt horrible, idk what happend but all of the sudden couple years later I keep finding clothes that fit me right, it makes me so happy to leave ross and tj maxx with 10 pieces of clothes that I enjoy and wear almost every day, it makes me feel productive and confident on what ever I am doing, it just means so much that Graham says its ok to spend 10% on that 😭😭😭….😅of course I'm half joking but I've never seen a break down of percentages and this is so help full!!! thank you Graham

  5. Get hit head on by a drunk driver and live in the northeast (❄️), and then tell me to buy a cheap car. Sorry, my life is worth more than what Dave Ramsey thinks.

  6. I’m saving 40% and still think I overspend. Oh well I guess I will just put my uber eats overspending into the “whatever I want” category instead lol

  7. How can I spend 3% on utilities if my monthly income $3000 I pay for phone $75, internet $75, electricity $50. Health insurance same over the budget.

  8. @grahamstephan what about property taxes? Is that included in the housing? Property taxes in my area in NJ average $12-14,000 per year on an average home. If I were to budget 20% of $100,000 income on housing including taxes and house insurance I'd be living in a shack 🤔

  9. Do you have recommendations for people who live in high cost of living areas that can not move due to family? For example 50% in the Bay Area is rent. Do you have any modified advice to this rule for these examples.

  10. So if I make 19/hour, approm $3000 a month it would be:
    420 – Housing
    210 – Transport.
    210 – Food
    105 – Health
    63 – Utilities
    210 – Whatever
    882 – Savings
    I don't know how I can rent a place, have a car and eat with that. Maybe you could do a video to poor people so you can help us out. Thanks.

  11. My maths teacher said -1 is more than -10. Also if you ask computer if -10 is less than -1 they will say yes. See the robot agree.
    Let's not think too hard about it.

  12. I max out my 401k employer match before paying extra on >5% student loans. My company puts in 8% if I contribute 4%, therefore double free money!! I’m also working on maxing out a Roth too. I’ve paid 6 student loans off this year but paused due to the pandemic. I add this extra money to my ally account so that I can put down a lump sum when I feel comfortable with work/economy. I still pay minimums on all loans too!

Leave a Reply

Your email address will not be published. Required fields are marked *



Make Money Online 2021 (Full Guide For Beginners)

How Stock Prices Work (Before You Start Investing!)