What is the 50/30/20 rule for managing money?

The 50/30/20 rule is a simple budgeting method that divides take-home income into three categories. Under the rule, 50% goes towards essential expenses, 30% towards non-essential expenses that improve quality of life, and 20% towards savings. The method can help people manage spending and build savings, but the percentages can be adjusted based on individual financial needs.