50/30/20 budget calculator
The 50/30/20 rule is a simple way to budget: spend about half of your take-home pay on needs, 30% on wants and put 20% toward savings and extra debt payments. Enter your monthly income after tax to get your numbers.
What goes in each bucket
- Needs (50%): rent or mortgage, utilities, groceries, insurance, transportation and minimum debt payments.
- Wants (30%): dining out, entertainment, subscriptions, travel and hobbies.
- Savings (20%): emergency fund, retirement, investments and payments above the minimum on debt.
Example
With $4,000 a month after tax: $2,000 for needs, $1,200 for wants and $800 for savings.
Frequently asked questions
What if my needs are more than 50%?
That is common in high-cost areas. Try 60/20/20 for a while and look for ways to lower fixed costs over time.
Should I use gross or net income?
Use net (take-home) income: what actually reaches your bank account after taxes and payroll deductions.