The 60% solution, Richard Jenkins' method, plainly explained.

The 60% solution is a budgeting method built around committed expenses and four separate uses for the remaining money. For the wider comparison, see budgeting methods compared. It is less common than 50/30/20, but it asks a useful question earlier in the process.

The method

The method puts 60% of gross income toward committed expenses. Committed expenses include housing, utilities, basic food, insurance, taxes, transport, minimum debt payments, and basic clothing. These are the costs that keep life running and are hard to change quickly.

The remaining 40% splits four ways: 10% retirement, 10% long-term savings, 10% short-term savings, and 10% fun. Short-term savings usually covers known future costs like annual expenses, gifts, trips, repairs, or other items that do not arrive neatly every month.

That split makes the method more detailed than it first appears. It is not just a cap on bills. It also separates future money into different distances from today, which is where many simpler methods get blurry.

Where it came from

The method is commonly associated with Richard Jenkins, an MSN Money columnist who wrote about it in the mid-2000s. His framing was meant to simplify household budgeting by separating committed expenses from money assigned to different time horizons. The exact percentages are the memorable part, but the committed-expense question is the deeper part.

What's clever about the 60% number

The 60% line forces a blunt check: are committed expenses actually around 60%, or are they higher? If they are higher, the method does not let the problem hide inside a vague "needs" bucket. It points at the part of the budget that is hardest to change.

This matters because committed expenses create the shape of the month. Flexible spending can move quickly. Housing, insurance, childcare, required transport, and debt payments often cannot. A budget that ignores that difference can overstate how much choice you really have.

The number also discourages hiding optional commitments inside the fixed side. A large car payment, a subscription bundle, or a housing choice may feel fixed once signed, but the method asks whether too many choices have become permanent claims on future income.

What the four 10% pots achieve

The four 10% pots divide money by time horizon. Retirement is the longest horizon. Long-term savings is for bigger future goals. Short-term savings handles known but lumpy costs. Fun is current discretionary spending.

That separation is useful because it prevents every non-bill dollar from looking the same. Money for an annual insurance bill is not the same as money for a weekend meal. Both may sit outside committed expenses, but they serve different jobs.

If the short-term pot is the one you keep raiding, read annual expenses. Many budgets fail there because predictable non-monthly costs are treated as surprises.

vs 50/30/20

Compared with 50/30/20, the 60% solution is more explicit about commitments. 50/30/20 groups needs, wants, and savings. The 60% solution asks whether committed expenses are crowding out every other purpose before you argue about wants.

The two methods can describe similar arithmetic. A person using 50/30/20 might put needs near 50% and savings near 20%. A person using the 60% solution might put committed expenses near 60% and divide the rest more precisely. The difference is not math purity. It is which question you want the method to ask first.

50/30/20 is easier to explain and faster to start. The 60% solution gives more language for savings time horizons and lumpy expenses. Neither removes the need to check whether the percentages match the real month.

The choice between them depends on which ambiguity bothers you more. If wants versus needs is the confusing part, 50/30/20 may be enough. If the confusing part is what kind of savings each dollar is for, the four 10% pots may give better labels.

Where this method falls down

At low incomes, the four 10% pots can become fiction. If committed expenses already consume most income, a clean 10% retirement line or 10% long-term savings line may not survive contact with rent, food, transport, and required payments.

At very high incomes, the 60% committed-expense line may be too generous. It can allow fixed lifestyle costs to expand until they consume more than they need to, leaving less room for flexibility later. The line is a check, not permission to fill the category.

The method also uses gross income, which can make the math feel less direct if taxes or payroll deductions vary. You can translate it to take-home income, but the translation changes the percentages. The useful question remains: how much of the month is already committed before optional spending begins?

A final weakness is category pressure. Four 10% pots look tidy on paper, but real goals rarely arrive in equal sizes. A household may need more short-term savings for a year and less fun, or more debt focus and less long-term saving. The method gives language; it should not freeze judgment.

It can also understate irregularity. A year with moving costs, medical costs, family support, or a large repair may not fit four equal pots. In those periods, the useful part is not the exact split. It is the habit of naming committed expenses and separating future money by purpose.

The method is most helpful when the percentages provoke a useful audit. It is least helpful when the round numbers become decorative labels on a plan that does not fit. Keep the questions; adjust the split when the real month demands it.

Its value is the prompt to inspect commitments, not the promise that five neat buckets can describe every year. If the buckets stop matching reality, the audit is still useful and the percentages can move without shame.