What budgeting method allocates 50 percent to needs, 30 percent to wants, and 20 percent to savings?

The method that allocates 50 percent of the budget to needs, 30 percent to wants, and 20 percent to savings is known as the 50-30-20 Method. This budgeting strategy is designed to simplify financial planning and encourage a balanced approach to personal finance. By categorizing spending in this way, individuals can ensure they cover essential expenses (needs), enjoy discretionary spending (wants), and simultaneously build their savings and investments.

The allocation encourages individuals to prioritize their financial responsibilities while still allowing room for enjoyment and future financial security. The clarity of this method helps many people to manage their finances effectively, regardless of income level, promoting the importance of saving and responsible spending.