The "50/20" rule is a budgeting guideline that suggests allocating 50% of your income to needs, 20% to savings, and the remaining 30% to wants. This approach helps individuals manage their finances by ensuring essential expenses are covered while also prioritizing savings for future goals. By following the 50/20 rule, individuals can create a balanced financial plan. The 50% for needs includes expenses like housing, food, and transportation, while the 20% for savings can go towards retirement accounts or emergency funds. The remaining 30% can be spent on discretionary items, such as entertainment or dining out.