50/30/20 Budget Calculator
Enter your monthly after-tax income and your actual spending. With $4,500 of income, the 50/30/20 split is $2,250.00 for needs, $1,350.00 for wants and $900.00 for savings.
How the 50/30/20 budget calculator works
The 50/30/20 rule splits after-tax income into three parts: 50 percent for needs such as rent, utilities, groceries and minimum debt payments, 30 percent for wants, and 20 percent for saving and extra debt payments. It is a starting guideline, not a law.
The formulas
Example: Income of $4,500 gives targets of $2,250.00, $1,350.00 and $900.00. If actual needs are $2,300 and wants are $1,200, savings left over are $1,000.00, a savings rate of 22.22%. Needs take 51.11% of income.
Notes and limits
- Use after-tax (take-home) income.
- In high-cost areas needs may be above 50 percent. Adjust the split to fit your situation.
- Put minimum debt payments under needs and extra payments under savings.
Figures are estimates for planning and are not financial advice. Check your own agreement or statement for exact terms.
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Frequently asked questions
What is the 50/30/20 rule?
A budgeting guideline: 50 percent of after-tax income to needs, 30 percent to wants and 20 percent to savings and debt repayment.
Is it based on gross or net income?
Net (after-tax) income, the money that reaches your bank account.
What if my needs are above 50 percent?
Trim wants first, or use a different split such as 60/20/20. The rule is a guide.
What counts as savings?
Emergency fund, retirement contributions and extra debt payments beyond the minimum.
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