<prompt> Human: My wife and I just started using this method for budgeting...5037; of income for necessities 3037; of income for wants 2037; of income for debtsavingsWe are liking it and wanted to see what other people thought.  <response>: The problem with percentage rules like this is that it almost confounds the issue of lifestyle inflation. In theory, your expenses should only increase relative to inflation. Remember, a car is just transportation, a house is a shelter, a vacation is a getaway. Anything above and beyond the functional level of need is an unnecessary increase in expenses. If, however, you resist these percentage rules and instead buy only what you truly need, you can increase your savings rate as you increase income. This could lend itself to early retirement or other goals. Just something to think about. 