Budget Calculator
A budget compares take-home pay with spending. The 50/30/20 rule puts about 50% of after-tax income toward needs, 30% toward wants and 20% toward savings and debt repayment. On $5,200 a month, the savings target is $1,040; spending $3,870 leaves $1,330 to save, which is 26% of income.
The 50/30/20 rule: 50% needs, 30% wants, 20% savings and debt repayment.
How to use the Budget Calculator
- Enter your monthly take-home (after-tax) pay.
- Enter monthly spending on housing, bills and transport, food, and everything else.
- Read what is left to save and your savings rate, which turns red if you overspend.
- Compare the needs, wants and savings bar with the 50/30/20 guideline.
Formula
Left to save = take-home pay - total spending · savings rate = left ÷ take-home × 100Housing, bills and transport, and food count as needs; everything else counts as wants. The 50/30/20 savings target is 20% of take-home pay.
The 50/30/20 rule
- Needs (50%): housing, utilities, groceries, insurance, transport, minimum debt payments.
- Wants (30%): dining out, entertainment, hobbies, subscriptions, travel.
- Savings and debt (20%): emergency fund, retirement, extra debt payments.
Irregular costs
Budget for yearly or occasional costs with sinking funds: estimate the annual cost of car repairs, holidays or gifts, divide by 12 and set that aside each month. $1,200 for car upkeep becomes $100 a month.
Budget Calculator questions
What is the 50/30/20 budget rule?
It splits after-tax income into 50% for needs, 30% for wants and 20% for savings and debt repayment. On $4,000 a month, that is $2,000 for needs, $1,200 for wants and $800 for saving. It is a starting point; in high-cost areas needs often take more than half.
Should I budget with gross or net income?
Use net (take-home) income, the amount that actually reaches your account after tax and payroll deductions. Budgeting from gross pay overstates what you can spend. If you earn $60,000 a year but take home $3,800 a month, budget with $3,800.
How much should I spend on housing?
A common guideline is no more than about 30% of gross income for rent or mortgage plus utilities, insurance and property tax. On $5,000 gross a month, that is about $1,500. In expensive cities it may reach 35% to 40%, which leaves less room for saving.
How much should I save each month?
Aim for at least 20% of take-home pay, covering both an emergency fund and long-term goals such as retirement. Build a small starter emergency fund first, then grow it to 3 to 6 months of expenses. If 20% is not possible yet, start smaller and raise it over time.
What should I do if my expenses exceed my income?
Track every expense for a month to find leaks, cut non-essential spending first, and renegotiate recurring bills such as phone, internet and insurance. Then look for extra income. While you fix the gap, prioritize housing, food, utilities and minimum debt payments.
Which expenses should I cut first?
Start with spending that brings little value: unused subscriptions, frequent takeaways and impulse purchases. Small habits add up, so cooking a few more meals at home can free up hundreds a month. Keep a modest fun budget so the plan is sustainable.
How often should I review my budget?
Review it monthly and adjust it whenever your income or circumstances change, such as a new job, a move or a new child. Monthly reviews catch overspending early, and quarterly check-ins are a good time to update savings goals.
Are cash envelopes or apps better for budgeting?
Either works if you use it consistently. Cash envelopes make overspending in categories like groceries and fun money hard. Apps and spreadsheets track everything automatically. Many people use a mix: automated transfers for bills and savings, and a fixed amount for day-to-day spending.