Episode 178: A Practical Guide to Dividing Your Income: Needs, Wants, and Savings

Have you ever wondered how much you should be spending on housing, groceries, cars, or fun? This episode breaks down how to create a realistic and values-based spending plan that fits your lifestyle and financial goals.

Whether you’re creating your first spending plan or re-evaluating where your money goes each month, this episode will help you understand how to balance your spending between needs, wants, and savings—and how to adjust that framework to fit your own circumstances.

You’ll learn practical tips for evaluating your current spending, how taxes and deductions affect your take-home pay, and what percentage of your income you might want to allocate to housing, transportation, and other categories.

 

🧭 In This Episode, You’ll Learn:

• How to analyze your past spending to build a realistic budget
• The difference between needs, wants, and savings
• How to apply (and adapt) the 50/30/20 rule to your own finances
• Why your take-home income—not your gross income—is the key to building a sustainable plan
• How to think about big expenses like housing, cars, and insurance
•  Why every spending plan should reflect your personal values and long-term goals

 

💡 Key Takeaways:

• Your ideal spending plan depends on your goals, lifestyle, and location.
• Start by tracking your current spending before deciding what to change.
• Keeping your needs at 50% or less of your take-home pay gives you flexibility.
• Saving and investing at least 20% of your income is key to long-term financial freedom.
• Spending on wants—guilt-free—is part of a healthy financial mindset.

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Dr. Elisa Chiang is a physician and money coach who helps other doctors reach their financial goals by mastering their money mindset through personalized 1:1 coaching .

You can learn more about Elisa at her website or follow her on social media.

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