Budget Calculator: 50/30/20 Budget Planner
Use our free budget calculator to plan your monthly finances using the popular 50/30/20 rule. Enter your income and expenses to see exactly how much you should spend on needs, wants, and savings. Perfect for creating a simple budget based on your salary.
Income Sources
Monthly Expenses
Budget Summary
Budget Breakdown
Budget Analysis
Budgeting Tips
- Follow the 50/30/20 rule: 50% for needs, 30% for wants, and 20% for savings
- Automate your savings to ensure consistent contributions
- Review and adjust your budget monthly to stay on track
- Prioritize paying off high-interest debt
- Build an emergency fund covering 3-6 months of essential expenses
- Look for ways to reduce fixed expenses like housing and transportation
How to Create a Budget That Works
A budget is simply a plan for your money. The 50/30/20 budget rule, popularized by Senator Elizabeth Warren, is one of the simplest and most effective budgeting methods. It divides your after-tax income into three categories to help you balance spending and saving.
The 50/30/20 Budget Rule Explained
| Category | Percentage | Examples |
|---|---|---|
| Needs | 50% | Rent/mortgage, utilities, groceries, insurance, minimum debt payments, transportation |
| Wants | 30% | Dining out, entertainment, subscriptions, hobbies, vacations, shopping |
| Savings | 20% | Emergency fund, retirement (401k/IRA), extra debt payments, investments |
Budget by Income Level
Here's how the 50/30/20 rule applies at different income levels:
| Monthly Income | Needs (50%) | Wants (30%) | Savings (20%) |
|---|---|---|---|
| $3,000 | $1,500 | $900 | $600 |
| $4,000 | $2,000 | $1,200 | $800 |
| $5,000 | $2,500 | $1,500 | $1,000 |
| $6,000 | $3,000 | $1,800 | $1,200 |
| $8,000 | $4,000 | $2,400 | $1,600 |
| $10,000 | $5,000 | $3,000 | $2,000 |
Budget Categories Breakdown
Rent & Housing (25-30%)
The 30% rule suggests spending no more than 30% of gross income on rent. Include rent/mortgage, property taxes, insurance, and HOA fees in this category.
Transportation (10-15%)
Car payment, insurance, gas, maintenance, parking, and public transit. If you can keep this under 10%, you'll have more for savings.
Food & Groceries (10-15%)
Groceries are a need; dining out is a want. The average American spends $400-600/month on groceries. Meal planning can reduce this significantly.
Savings & Retirement (15-20%)
Prioritize: 1) 401k match, 2) Emergency fund (3-6 months expenses), 3) High-interest debt, 4) IRA/additional retirement, 5) Other investments.
Frequently Asked Questions
What is the 50/30/20 budget rule?
The 50/30/20 rule divides your after-tax income into: 50% for needs (rent, utilities, groceries), 30% for wants (entertainment, dining out), and20% for savings (retirement, emergency fund, debt payoff).
How much of my income should go to rent?
The traditional guideline is 30% of gross income for rent. However, in expensive cities, many people spend 40% or more. If rent exceeds 30%, reduce spending in other categories to maintain your savings rate.
What if I can't save 20%?
Start with what you can—even 5% is better than nothing. Focus on reducing expenses or increasing income. Automate savings so it happens before you can spend it. Gradually increase your savings rate by 1% every few months.
Should I use gross or net income for budgeting?
Use net income (after-tax) for the 50/30/20 rule. This is your actual take-home pay. If your employer deducts 401k contributions, add those back to your "savings" category since they count toward your 20%.
How do I budget for irregular expenses?
Create "sinking funds" for irregular expenses like car repairs, medical bills, or annual subscriptions. Estimate the annual cost, divide by 12, and set aside that amount monthly. This prevents budget-busting surprises.
Related Calculators
- Debt Payoff Planner - Create a strategy to pay off debt faster
- Emergency Fund Calculator - Calculate how much to save
- Retirement Calculator - Plan for your future
- Savings Calculator - Track your savings goals
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Disclaimer: This budget calculator provides general guidance based on the 50/30/20 rule. Your ideal budget may vary based on your location, debt level, and financial goals. This tool is for educational purposes only and does not constitute financial advice.