Budget Calculator
Plan your monthly budget using the 50/30/20 rule. Enter your take-home income and see recommended allocations for needs, wants, and savings.
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The 50/30/20 Budget Rule
The 50/30/20 rule, popularized by Senator Elizabeth Warren, divides after-tax income into three categories: 50% for needs (housing, food, utilities, insurance, transportation), 30% for wants (entertainment, dining out, hobbies), and 20% for savings and debt repayment.
Is the 50/30/20 Rule Right for You?
This rule works well as a starting framework but may need adjusting. In high-cost-of-living areas, housing alone may exceed 30% of income. If you have significant debt, you may want to allocate more than 20% to debt payoff. The key is awareness — knowing where your money goes is the first step to financial control.
Frequently Asked Questions
What is the 50/30/20 budget rule?
Spend 50% of after-tax income on needs, 30% on wants, and 20% on savings/debt repayment. It's a simple framework for balanced spending.
How much should I spend on housing?
The general guideline is 25-30% of gross income or 30-35% of take-home pay. In the 50/30/20 framework, housing is part of the 50% needs category.
What if I can't save 20%?
Start with whatever you can — even 5% or 10%. Automate your savings so it happens before you spend. Increase by 1% every few months as you adjust.