50/30/20 Budget Calculator (2024)

Budget Calculator : The 50/30/20 Rule

Our budget calculator will divide your after-tax income into three categories: 50% for needs, 30% for wants, and 20% for savings.

Budget Calculator : The 50/30/20 Rule

Our budget calculator will divide your after-tax income into three categories: 50% for needs, 30% for wants, and 20% for savings.

$

Your 50/30/20 Budget

Add your monthly income on the left to calculate.

50/30/20 Budget Calculator (1)

Needs

$0

Essential required expenses – including housing, utilities, and minimum debt payments.

50/30/20 Budget Calculator (2)

Wants

$0

May include expenses you don’t always need, such as restaurants, travel, or entertainment.

50/30/20 Budget Calculator (3)

Savings

$0

Should include emergency funds, retirement, and extra debt payments.

How to track your monthly budget

Budgeting comes down to tracking how much you earn compared to how much you spend – and how much you want to save. While budgeting can seem like a chore at times, there are a few simple methods that can help you track your spending and stay focused on your goals. To use the 50-30-20 budget method, you’ll start by looking at your monthly expenses.

What Is the 50/30/20 Rule?

The 50/30/20 budget is an easy way to focus your budgeting goals. To get started, you will sort your expenses into three buckets — your needs, wants, and savings. Here’s how it works:

50% for your needs

Half of your income should go toward essentials or necessities, such as housing (including mortgage or rent), groceries, transportation, health insurance, and the minimum payment on your debts, such as student loans.

30% for your wants

This portion of your income can go toward purchases you want but don’t necessarily need, such as travel, dining out, entertainment, or shopping.

20% for your savings

The rest should go toward your savings, including any investments or retirement accounts, building your emergency savings, or making additional debt payments (after your minimum payments).

Calculating your target budget

What does this look like? If you make $3000 a month after taxes, then 50% ($1500) would go toward needs, the next 30% ($900) goes toward your wants or discretionary spending, and the remaining 20% ($600) goes toward your savings.

While keeping track of your budget may seem complicated, a simple method, like the 50-30-20 rule can help understand where your money is going. And if you have a specific savings goal in mind, such as saving for a wedding, emergency fund, or vacation, your budget can help you stay on target to reach that goal.

50/30/20 Budget Calculator (2024)

FAQs

How do you calculate the 50 30 20 budget? ›

The idea is to divide your income into three categories, spending 50% on needs, 30% on wants, and 20% on savings. Learn more about the 50/30/20 budget rule and if it's right for you.

Is the 50/30/20 rule realistic? ›

For many people, the 50/30/20 rule works extremely well—it provides significant room in your budget for discretionary spending while setting aside income to pay down debt and save. But the exact breakdown between “needs,” “wants” and savings may not be ideal for everyone.

How do you distribute your money when using the 50 20 30 rule responses? ›

Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.

What is the 75 15 10 rule? ›

In his free webinar last week, Market Briefs CEO Jaspreet Singh alerted me to a variation: the popular 75-15-10 rule. Singh called it leading your money. This iteration calls for you to put 75% of after-tax income to daily expenses, 15% to investing and 10% to savings.

How do I calculate my budget? ›

The 50/30/20 approach can be a helpful way to get started with budgeting. It's a simple rule of thumb that suggests you put up to 50% of your after-tax income toward things you need, 30% toward things you want, and 20% toward savings.

What is the budget formula? ›

We recommend the 50/30/20 system, which splits your income across three major categories: 50% goes to necessities, 30% to wants and 20% to savings and debt repayment.

Can you live off $1000 a month after bills? ›

Living on $1,000 per month is a challenge. From the high costs of housing, transportation and food, plus trying to keep your bills to a minimum, it would be difficult for anyone living alone to make this work. But with some creativity, roommates and strategy, you might be able to pull it off.

What are the flaws of the 50 30 20 rule? ›

Disadvantages of the 50/30/20 Budget

Many people find it hard to allocate 20% of their income toward savings. If you live in a large metropolitan area with a high cost of living, it may be difficult or impossible to include all your needs with only 50% of your income.

Is $4000 a good savings? ›

Ready to talk to an expert? Are you approaching 30? How much money do you have saved? According to CNN Money, someone between the ages of 25 and 30, who makes around $40,000 a year, should have at least $4,000 saved.

What is one negative thing about the 50 30 20 rule of budgeting? ›

Some Experts Say the 50/30/20 Is Not a Good Rule at All. “This budget is restrictive and does not take into consideration your values, lifestyle and money goals. For example, 50% for needs is not enough for those in high-cost-of-living areas.

Is 50/30/20 gross or net? ›

50% of your net income should go towards living expenses and essentials (Needs), 20% of your net income should go towards debt reduction and savings (Debt Reduction and Savings), and 30% of your net income should go towards discretionary spending (Wants).

What is the 50 30 20 rule for high earners? ›

Our 50/30/20 calculator divides your take-home income into suggested spending in three categories: 50% of net pay for needs, 30% for wants and 20% for savings and debt repayment. Find out how this budgeting approach applies to your money.

Why does Rule 72 work? ›

The value 72 is a convenient choice of numerator, since it has many small divisors: 1, 2, 3, 4, 6, 8, 9, and 12. It provides a good approximation for annual compounding, and for compounding at typical rates (from 6% to 10%); the approximations are less accurate at higher interest rates.

What does the 70 20 10 rule set aside? ›

The 70-20-10 budget formula divides your after-tax income into three buckets: 70% for living expenses, 20% for savings and debt, and 10% for additional savings and donations. By allocating your available income into these three distinct categories, you can better manage your money on a daily basis.

What is the Rule of 72 the amount of time to double your money? ›

If, for example, your account earns 4 percent, divide 72 by 4 to get the number of years it will take for your money to double. In this case, 18 years.

How do you stick to a 50 30 20 budget? ›

Here's what a budget that adheres to the 50/30/20 rule looks like:
  1. Spend 50% of your money on needs. ...
  2. Spend 30% of your money on wants. ...
  3. Stash 20% of your money for savings. ...
  4. Calculate your after-tax income. ...
  5. Categorize your spending for the past month. ...
  6. Evaluate and adjust your spending to match the 50/30/20 rule.
Aug 12, 2022

What is the 50 30 20 rule of budgeting examples? ›

For example, if you earn ₹ 1 lakh, you can allocate ₹ 50,000 to your needs, ₹ 30,000 to your wants and ₹ 20,000 to your savings, every month.

What are the numbers on the 50 30 20 budget spreadsheet? ›

Designate 50% of your income to needs (mortgage/rent, utilities, car payments), 30% to wants (travel, concerts, fashion splurges) and 20% goes directly to your savings account(s) and debts.

What is the formula for percent to budget? ›

To calculate a budget percentage, subtract the actual budget from the planned budget, then divide by the planned budget amount and multipy by 100. If the value of this formula turns out to be positive, then it is displaying the percentage under budget. If it is negative it is displaying the percentage over budget.

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