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Budget Calculator (50/30/20 Rule)

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The 50/30/20 rule is a simple starting framework for budgeting: 50% of after-tax income toward needs, 30% toward wants, and 20% toward savings and debt payoff beyond the minimums. Enter your monthly take-home pay to see the split.

50/30/20 Budget Calculator

Live
Needs budget
$2,500
Wants
$1,500
Savings/debt
$1,000
Adjust the three percentages to fit your own situation — 50/30/20 is a starting point, not a rule.

The 50/30/20 formula

Needs = Income × 50% · Wants = Income × 30% · Savings/debt = Income × 20%
Example

$5,000/month after tax: $2,500 for needs (rent, groceries, utilities, minimum debt payments), $1,500 for wants (dining out, hobbies, entertainment), and $1,000 for savings or extra debt payoff.

Step-by-step guide

  1. Enter your monthly take-home (after-tax) income.
  2. Adjust the three percentages if 50/30/20 doesn't fit your situation — someone with high rent might use 60/20/20, for example.
  3. Sort your expenses into needs (essentials), wants (non-essential lifestyle spending), and savings/debt paydown, and compare against each budget.

Common mistakes

Classifying every expense as a "need" — streaming subscriptions, dining out, and similar discretionary spending usually belong in "wants," even if they feel routine.
Using gross income instead of after-tax income — this framework is meant to apply to what actually lands in your bank account.

Frequently asked questions

What counts as a "need"?

Generally: housing, utilities, groceries, transportation to work, insurance, and minimum debt payments. If you'd struggle to get by without it, it's usually a need; if it's for enjoyment, it's usually a want.

What if my rent alone is more than 50% of my income?

This is common in higher cost-of-living areas. Adjust the percentages above to reflect your reality — a 60/20/20 or 65/15/20 split, for example — rather than forcing an unrealistic 50% needs cap.

Does the 20% have to go to savings?

The 20% category is usually meant for both savings and any debt paydown beyond minimum payments (which count as "needs"). Split it however makes sense for your goals.

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