Budget Calculator
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Results
Spending $3,750 and saving $500 of $5,000 a month leaves $750; savings rate 10%.
- Housing (30%)
- $1,500
- Utilities (5%)
- $250
- Food (12%)
- $600
- Transportation (8%)
- $400
- Insurance and health (5%)
- $250
- Debt payments (4%)
- $200
- Savings and investing (10%)
- $500
- Personal and fun (7%)
- $350
- Other (4%)
- $200
| Group | Your amount | Your share | Rule share | Rule amount | Difference |
|---|---|---|---|---|---|
| Needs | $3,200 | 64% | 50% | $2,500 | +$700 |
| Wants | $550 | 11% | 30% | $1,500 | −$950 |
| Savings | $500 | 10% | 20% | $1,000 | −$500 |
| Not assigned | $750 | 15% | – | – | – |
$750 a month is not assigned to anything. Giving it a job, such as savings or debt payoff, makes it less likely to drift away.
The 50/30/20 split is a rule of thumb, not a standard. High housing costs, debt payoff goals or a low income can make a different split sensible.
How to use the budget calculator
- Choose whether you are entering amounts per month or per year, and use the same period for everything.
- Enter your take-home pay: what reaches your bank account after tax, retirement contributions and other deductions.
- Fill in each category. Bank and card statements from the last two or three months give realistic figures. Leave a category blank if it doesn't apply.
- Compare the result with the 50/30/20 rule, or change the percentages to a split that suits you.
Budget formulas
Left over = take-home pay − total spending − savings
Savings rate = savings ÷ take-home pay × 100
Needs = housing + utilities + food + transport + insurance + debt payments
Wants = personal + other
The 50/30/20 rule splits take-home pay into three groups: about half for needs, 30% for wants and 20% for savings and paying off debt beyond the minimums. It was popularized by Elizabeth Warren and Amelia Warren Tyagi in their book All Your Worth. It is a rule of thumb for checking balance, not a target everyone must hit. Food is counted as a need here; if a large part of it is eating out, you may prefer to count that as a want.
Worked example
Take-home pay is $5,000 a month. Housing ($1,500), utilities ($250), food ($600), transport ($400), insurance ($250) and minimum debt payments ($200) add up to $3,200 of needs, which is 64% of income. Personal and other spending come to $550 (11%), and $500 goes to savings (10%).
Total spending is $3,750, so after saving $500 there is $750 left over each month. The savings rate is 10%; moving the leftover into savings would lift it to 25%, above the rule's 20%. Needs run $700 over the rule's $2,500, which is common where housing is expensive, while wants are well under it.
50/30/20 amounts by take-home pay
| Monthly take-home pay | Needs (50%) | Wants (30%) | Savings (20%) |
|---|---|---|---|
| $2,500 | $1,250 | $750 | $500 |
| $3,500 | $1,750 | $1,050 | $700 |
| $4,500 | $2,250 | $1,350 | $900 |
| $5,500 | $2,750 | $1,650 | $1,100 |
| $6,500 | $3,250 | $1,950 | $1,300 |
| $8,000 | $4,000 | $2,400 | $1,600 |
| $10,000 | $5,000 | $3,000 | $2,000 |
Budgeting tips
- Start with what you actually spend. A budget built on hopes rather than statements usually breaks in the first month.
- Include irregular costs. Car repairs, gifts, annual subscriptions and insurance premiums paid yearly are easy to forget. Divide the yearly total by 12 and include it.
- Pay yourself first. Moving savings out on payday makes the savings rate happen before spending fills the gap.
- Build an emergency fund. A cushion of a few months' needs stops a surprise bill from going on a credit card.
- Review every few months. Income, rent and prices change. Small adjustments keep the plan realistic.
Looking at housing costs? The rent calculator shows what rent your income supports. Paying off cards? Try the debt payoff calculator. To see what your savings could grow to, use the savings calculator.
Frequently asked questions
What is the 50/30/20 budget rule?
A rule of thumb that splits take-home pay into about 50% for needs, 30% for wants and 20% for savings and extra debt payments. On $5,000 a month that is $2,500, $1,500 and $1,000. It is a guide, not a requirement.
How do I calculate my savings rate?
Divide what you save each month by your take-home pay and multiply by 100. Saving $500 out of $5,000 is a 10% savings rate. Counting any unassigned money as savings would raise it.
Should I budget with gross or take-home pay?
Take-home pay, because that is the money you can actually spend. Tax and payroll deductions have already left. Rules such as the 30% rent guideline use gross income instead, so check which one a rule expects.
What counts as a need and what is a want?
Needs are costs you must pay to live and work: housing, utilities, groceries, transport, insurance and minimum debt payments. Wants are optional: dining out, entertainment, hobbies, travel and most shopping. Some items, like food, can be partly both.
What if my needs are more than 50% of my income?
That is common, especially where housing is expensive. In the example, needs are $3,200 of $5,000, or 64%. The rule is a starting point: cut wants, look for cheaper fixed costs over time, and keep saving something, even if it is less than 20%.