Fundamentals of Finances

One of the most popular budgeting methods is the 50/30/20 split, where 50% of income goes toward needs, 30% toward wants, and 20% toward savings.

When I began working in high school, I quickly found that this split didn’t work for me. As a minor and a student, I didn’t have financial needs that required 50% of my income.

Often, due to the lack of financial guidance for high schoolers earning their first income, many students make the mistake of spending 100% of their paycheck on wants.

Earning money from your first job can feel like a massive jump in income, making lifestyle inflation much more likely.

Because of this, I wanted to share my version of the 50/30/20 budgeting split—one that I adopted when I started working in high school.

Before working, my parents gave me $10 per week. At the time, I never felt like I was struggling financially. Sure, I couldn’t buy everything I wanted, but I learned how to budget that allowance to afford food and small items I enjoyed.

Then came my first job, where I was suddenly making over $400 a week—a huge increase from my allowance. This left me wondering how much I should save and how much I could reasonably spend.

In a perfect world, I would have spent as little as possible—maybe even stuck to that $10/week habit—and saved the rest. But of course, that was an unrealistic expectation for any high schooler earning real money for the first time.

So, after a few years of working without rent, bills, or traditional “needs,” I created a budget plan that helped me stick to my goals. These numbers may vary depending on how many hours you work, but here’s the breakdown that worked for me:

• 50% of each paycheck went into long-term savings for big future purchases like a car or college tuition.
• 30% went into short-term savings for large upcoming wants—concert tickets, vacations, or big shopping days.
• 20% was reserved for immediate spending on short-term wants like food, clothing, or entertainment.

I’ve met other high schoolers whose parents required them to pay rent or contribute to household expenses. That, along with owning a car, are two of the most common “needs” at this age that would change the budgeting equation.

In those cases, it’s still important to create a budgeting plan that fits your specific situation. Spending money without at least a rough budget sets the stage for excessive spending, overconsumption, and lifestyle inflation—habits that can be hard to break in adulthood.

Budgeting isn’t just a financial tool—it’s a way for young people to develop patience, self-control, and discipline. Practicing any form of budgeting from an early age can pay off—literally and figuratively.