The Budgeting Rule of 3: Needs, Wants, and Dreams

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Have you ever felt like budgeting is too complicated, too restrictive, or too much of a hassle to keep up with? If you’ve nodded “yes,” you’re not alone. But what if I told you there’s a simpler, more intuitive way to approach your money, one that helps you meet your needs, enjoy your wants, and invest in your dreams?

Let me introduce you to what I call the Budgeting Rule of 3: Needs. Wants. Dreams.

This rule is more than a spending guide, it’s a mindset shift. It helps you manage your money in a way that aligns with your lifestyle, your values, and your future goals.

Let’s unpack it.

1. Needs – Cover Your Essentials First

Your needs are the non-negotiables. These are the bills that keep the lights on, the roof over your head, and your belly fed. Think:

• Rent or mortgage

• Utilities

• Groceries

• Transportation

• Insurance

• Loan payments

Needs usually take up about 50% of your income, though this might vary depending on your lifestyle or location. The key is to be honest about what’s truly essential. Netflix is fun, but it’s not a need. Your light bill? Absolutely.

Budgeting Tip: Review your current “needs” category and ask yourself: Can I trim any of these without affecting my quality of life? For example, switching to a more affordable grocery store or bundling insurance policies could free up funds.

2. Wants – Enjoy Your Life Intentionally

Life isn’t just about surviving, it’s about thriving. Your wants are the things that bring you joy, comfort, and convenience. They’re not essential, but they sure make life more enjoyable.

• Dining out

• Streaming services

• Beauty and self-care

• Entertainment

• Gym membership

• Shopping

A good rule of thumb is to allocate around 30% of your income to this category. It might sound high, but remember, we’re aiming for balance, not burnout.

Empowerment Insight: Budgeting your wants isn't about restriction, it's about permission. Give yourself guilt-free enjoyment by planning for the fun stuff.

3. Dreams – Build the Future You Desire

Now this is the magic part. Your dreams are the long-term goals that fuel your ambition and give purpose to your hustle. These include:

• Emergency savings

• Retirement fund

• Business investments

• Buying a home

• Starting a new career

• Travel plans

• Personal development

Ideally, 20% or more of your income should go toward this category. Dreams give your money direction. When you save for something meaningful, you’re more motivated to stick to your budget.

Boss Move: Automate your dream contributions. Set up auto-transfers to a savings or investment account each month. Out of sight, growing with intention.

Real-Life Budget Breakdown Using the Rule of 3

Let’s say your monthly income is JMD$300,000 or USD$3,000. Here’s how you could break it down:

• Needs (50%): JMD$150,000 or USD$1,500.00 – Rent, utilities, food

• Wants (20%): JMD$60,000 or USD$600.00 – Dining out, Netflix, gym

• Dreams (30%): JMD$90,000 or USD$900.00 – Emergency fund, vacation savings, career course

And the best part? You can tweak it! Some months, you might scale back on wants to boost your dreams. Other times, you might reallocate based on life changes. That’s the beauty of a flexible, values-driven plan.

CONCLUSION

The Budgeting Rule of 3 is about making budgeting feel right. It simplifies the process, removes the guilt, and gives you permission to live well while building your legacy.

So ask yourself today: Are your needs covered, your wants enjoyed, and your dreams funded?

If not, it’s time to reset, realign, and take back control, one budget line at a time!

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Want to put the Rule of 3 into practice? Purchase my Starter Budget Planner on Amazon, visit www.budgetingbasicsboss.com for weekly blogs and Follow me on Social Media for weekly tips every Wednesday to help you make budgeting a lifestyle. Next week, we'll look at How to Plan a Dream Vacation on a Budget.