The heart wants what it wants, and my brain is in cahoots

Budgeting can feel restrictive, especially if you are tightly controlling your spending across multiple different categories. If your budget feels like it’s holding back your freedom of choice, there’s a simpler solution you could try called proportional budgeting. It works like this: You divide up your monthly income into buckets based on percentage.

  • A certain percentage is allocated to your “needs” — These are things you have to have.
  • Another percentage is set aside for “wants” — the things you choose to buy — but can survive without. Things you’d like to have.
  • The rest goes to “savings” — the amount you put aside for the future.

A popular example of a proportional budget is Harvard economist Elizabeth Warren’s 50–30–20 Rule of Thumb. She proposes the following allocation of your after-tax income:

  • Limit your needs to 50% of your income
    Figure out how much you spend on “needs” such as groceries, housing, utilities, and transport. The amount that you spend on these “needs” should be no more than 50% of your total after-tax income.
  • Limit your wants to 30% of your income
    I loved this one the first time I saw it. 30% of my money can be put towards my wants? Hello, beautiful shoes, trip to Spain, and fancy restaurants. Maybe, but remember these also include things like DSTV, your gym contract, even home internet. Basically any discretionary spending that you could forego with only minor inconvenience is a want.
  • Spend at least 20% of your income on savings and debt repayments
    Spend at least 20% of your after-tax income repaying debts and saving money in your emergency fund or for retirement. If you have credit or retail cards, the minimum payment is a “need,” which counts towards the 50%. Anything over that is an additional debt repayment, which qualifies towards this 20%. The same logic applies if you have a bond or a vehicle loan, the minimum payment is a “need” and extra payments count toward your “savings and debt repayment.”

Needs vs Wants
Telling the difference between a need and a want sounds simple enough, but when you actually start grouping your expenses, there’s a surprising amount of wiggle room. You need food, but do you need chocolate chip cookies? You need clothes, but do you really need so many pairs of jeans?

Technically, there’s nothing wrong with buying organic 7-grain gluten-free honey-scented truffle-infused artisan bread or paying for expensive cellphone contracts. As long as you understand that these are not needs, you’re free to spend 30% of your income on things you want.

In earlier times, the Greek philosophers considered the heart to be the seat of all emotion, known to monitor thoughts, reason, logic, personality and even behaviour to an extent. Today, the heart is still used as a figure of speech for emotion. The saying ‘The heart wants what it wants’ implies that we are not under conscious, cognitive control of our emotions. That the heart wants something that isn’t good for it. And that the heart will pursue it, relentlessly, consequences be damned.

Distinguishing “wants” from “needs” can ultimately help you realise how much power and control you have over your own behaviour. If you’re choosing to spend money on wants, you can just as easily choose not to.

The key is to separate your wants from your needs so that you’re more self-aware of how you’re spending money.

The 50–30–20 Rule of Thumb makes total sense and it might work for you. My heart and brain, however, are always conspiring to get what they want. As soon as my heart points out something it desires, my brain finds loopholes to justify it as a need.

To outsmart them both, I prefer a simpler version of the proportional budget, known as the 80–20 rule.

  • Spend at least 20% of your income on savings and debt repayments. Just make sure you pay yourself first, that way, everything that’s left is yours to do with what you please.
  • Limit everything else to 80% of your income

The beauty of the 80–20 rule is you don’t have to argue with yourself about wants vs needs. As long as you stash 20% somewhere safe, the wants/needs proportion doesn’t matter. (Once you achieve 80–20, why not try 70–30?)

Then you’ll realise that budgeting is not about restricting yourself. Budgeting is the art of aligning your spending with your values.

Originally published at on September 9, 2016.



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Thoughts, observations and insights. About money, life and 22seven. Visit