50/30/20 Budget Calculator
The 50/30/20 Budget Calculator applies the popular budgeting rule to your after-tax income: 50% for needs, 30% for wants and 20% for savings and debt repayment, with dollar amounts for each.
What this means
The 50/30/20 rule is a simple spending framework: half your after-tax income covers needs, 30% funds wants, and 20% builds savings and pays down debt. It's a starting point you can tune to your situation.
How we calculate it
Formula
Needs = 50% × income, Wants = 30% × income, Savings = 20% × income.Worked example
A $5,000 monthly take-home income:
- 1Needs = 50% × $5,000 = $2,500
- 2Wants = 30% × $5,000 = $1,500
- 3Savings = 20% × $5,000 = $1,000
Important assumptions
- Income is after-tax take-home pay.
- The 50/30/20 split is a guideline, not a rule set in stone.
Frequently asked questions
What counts as a 'need' vs a 'want'?
Needs are essentials: housing, utilities, groceries, transport and minimum debt payments. Everything optional belongs in wants or savings.
What if my needs cost more than 50%?
That's common, especially in expensive areas. Trim the biggest needs line items, raise income, or temporarily reduce the wants share.