A CFP’s simple rule of thumb for balancing your financial priorities, and the accounts to use

Ever look at your paycheck and wonder how you're supposed to save, invest for retirement and cover essentials — all at the same time? There's no one-size-fits-all formula but the best approach is usually the one that feels realistic enough to actually stick with.

For CFP Cary Carbonaro, a managing advisor at Ashton Thomas Private Wealth, balancing savings, spending and investing often comes down to what she calls the "1/3 rule." She explains that after covering your bills, what's left over — your discretionary income — can be divided into "a third, a third and a third" for saving, spending and investing.

While it's not a hard-and-fast rule, Carbonaro says this approach helps people create structure without feeling restricted and ensures no priority gets overlooked. Here's how to put the 1/3 rule into practice with your own finances.

The 1/3 rule is a simple way to think about dividing the money you have left after paying your bills. You split that leftover amount into three parts: 1/3 for saving, 1/3 for spending and 1/3 for investing. It's not a strict formula, but more of a flexible guideline to help you balance your financial goals without feeling overwhelmed.

For example, the savings portion might go toward building an emergency fund or saving up for a short-term goal like a vacation or a new laptop. The investing portion usually includes long-term goals such as contributing to a retirement account like a 401(k) or IRA, or investing in a brokerage account for future growth. The spending portion covers everyday expenses or fun purchases.

Depending on your situation, you might adjust the percentages. If you're focusing on paying down debt, you might reduce the investing portion temporarily. Or if you already have a solid emergency fund, you could increase investing and spending. The key is to find a balance that fits your priorities and cash flow.

To put the 1/3 rule into action, pairing each bucket with the right account or product also makes a big difference:

Savings

A high-yield savings account is ideal for building your emergency fund or saving for short-term goals. Plus, you'd earn higher interest than with traditional savings accounts.

Marcus by Goldman Sachs, for example, is popular for its no-fee and user-friendly platform. It also has no limits on the number of withdrawals or transfers you can make from your online savings account, which is helpful if you need frequent access to your funds.

The EverBank Performance Savings offers one of the most competitive APYs to maximize your earnings and it also has no minimum balance requirements or monthly fees.

Spending

When it comes to spending, it's important to have a clear idea of where your money is going so you can accurately allocate funds toward your spending bucket. Expense tracker apps can be a big help here.

For those who prefer zero-based budgeting, You Need a Budget (YNAB) helps assign every dollar a job, syncs with your bank and credit accounts and offers tools to set saving and debt goals. Monarch also offers a clear overview by linking all your accounts, categorizing spending, tracking net worth and letting you set and monitor financial goals.

Investing

If you're focused solely on your employer's 401(k), it's important not to miss out on the employer match if it's offered. That's essentially free money that helps your savings grow faster. If you're also looking to invest beyond your 401(k), like an IRA or brokerage account, trusted platforms like Fidelity and Charles Schwab offer low-cost, user-friendly options with a wide range of investment choices and helpful tools to build a diversified portfolio aligned with your long-term goals.

Let's say you have $900 left each month after paying your essential bills. Using the 1/3 rule, you'd divide that money into three equal parts:

• $300 goes toward savings, such as building an emergency fund or saving for a short-term goal like a vacation
• $300 is for everyday spending — groceries, dining out or small treats
• $300 is for investing, like contributing to your 401(k), IRA or a brokerage account for long-term growth

Now imagine a different situation: You're focused on paying off credit card debt and don't have much in savings yet. Instead of investing the full 1/3, you might allocate:

• $400 to pay down debt aggressively,
• $300 to build a small emergency fund and
• $200 for spending on essentials

This way, the 1/3 rule is flexible enough to help you prioritize what matters most while keeping your finances balanced.

At CNBC Select, we work with experts who have specialized knowledge and authority based on relevant training and/or experience. For this story, we interviewed Cary Carbonaro, a certified financial planner and managing advisor at Ashton Thomas Private Wealth.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every personal finance article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of personal finance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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