50/30/20 Budget Calculator
Create a balanced budget that works for your lifestyle
The 50/30/20 rule is one of the most popular budgeting frameworks because it's simple, flexible, and effective. Our calculator not only helps you allocate your income using this time-tested method, but also compares it with alternative rules to find the best fit for your unique situationāwhether you're in a high cost-of-living area, aggressively paying off debt, or pursuing financial independence.
Open Source & Transparent
All calculations are open source and verifiable on GitHub. We believe in transparency and welcome contributions to improve our tools.
Budget Health Score
50/30/20 Rulefair
55/100
Monthly Income
$5,000
Needs (50%)
$2,500
Wants (30%)
$1,500
Savings (20%)
$1,000
Monthly After-Tax Income
Enter your total take-home pay after taxes and deductions
Choose Your Budget Rule
Select a budgeting strategy that fits your situation
Track Your Spending
Enter actual expenses to compare against your budget targets
Budget Rule Comparison
See how different budget rules would allocate your income
| Rule | Needs | Wants | Savings | 5-Year Growth | Fit |
|---|---|---|---|---|---|
50/30/20 RuleBest Fit | $2,500 | $1,500 | $1,000 | $70K | 85% |
50/20/30 Rule | $2,500 | $1,000 | $1,500 | $104K | 85% |
50/20/30 Debt Focus | $2,500 | $1,000 | $1,500 | $104K | 85% |
Pay Yourself First | $2,750 | $1,250 | $1,000 | $70K | 85% |
60/20/20 Rule | $3,000 | $1,000 | $1,000 | $70K | 80% |
Annual Summary
Recommendations
š Track your actual expenses for 1 month to see how your spending compares to targets
š° You have room to increase savings. Consider automating transfers to investment accounts
š”ļø Priority: Build emergency fund to 3-6 months of expenses before aggressive investing
š Target a 20% savings rate. Even small increases compound significantly over time
ā” Automate your budget: Set up automatic transfers on payday to enforce your budget
Important
ā ļø Savings below 5% of income makes it difficult to build financial security.
The 50/30/20 Rule
50% Needs
Essentials: housing, utilities, groceries, transportation, insurance
30% Wants
Lifestyle: dining out, entertainment, shopping, travel, hobbies
20% Savings
Future: emergency fund, retirement, investments, extra debt payments
Understanding the 50/30/20 Budget Rule
The 50/30/20 rule was popularized by Senator Elizabeth Warren in her book "All Your Worth: The Ultimate Lifetime Money Plan." It provides a simple framework for dividing your after-tax income into three categories: needs, wants, and savings.
Unlike detailed line-item budgets that track every penny, the 50/30/20 approach gives you flexibility within each category while ensuring you cover essentials, enjoy life, and build wealth. It's perfect for those who find traditional budgeting too restrictive or time-consuming.
The Three Budget Categories
50% Needs
Essential expenses you must pay
Needs are expenses you can't avoidāthings you literally need to survive and function in modern society.
Housing
Rent/mortgage
Utilities
Electric, water, gas
Groceries
Basic food needs
Transportation
Car payment, bus pass
Insurance
Health, auto, home
Minimum Payments
Required debt payments
Childcare
Necessary for work
Healthcare
Prescriptions, copays
30% Wants
Discretionary spending and lifestyle
Wants are things that make life enjoyable but aren't strictly necessary. This includes upgrades to necessities (a nicer car, organic groceries) and pure lifestyle spending.
Dining Out
Restaurants, coffee
Entertainment
Movies, concerts
Shopping
Clothes, gadgets
Subscriptions
Netflix, Spotify
Travel
Vacations, trips
Hobbies
Sports, crafts
Personal Care
Gym, spa, salon
Gifts
For others
20% Savings
Building wealth and paying off debt
Savings includes everything that builds your financial futureāemergency funds, retirement accounts, investments, and extra debt payments beyond the minimum.
Emergency Fund
3-6 months expenses
Retirement
401(k), IRA
Investments
Stocks, bonds
Extra Debt
Beyond minimums
Alternative Budget Rules
The 50/30/20 rule isn't one-size-fits-all. Our calculator includes several alternatives:
60/20/20 Rule
For high cost-of-living areas where needs require more of your income.
50/20/30 Rule
Aggressive saving versionāprioritize savings over wants.
70/10/20 Minimalist
For those who prefer minimal discretionary spending.
80/10/10 Starter
Realistic starting point for those rebuilding finances.
Tips for Budget Success
Use After-Tax Income
Always calculate your budget based on take-home pay, not gross income. This is the money you actually have to work with.
Automate Savings First
Set up automatic transfers to savings accounts on payday. Pay yourself first and spend what's left.
Track for One Month
Before setting a budget, track your actual spending for 30 days. You might be surprised where your money goes.
Build Emergency Fund First
Before aggressive investing, build 3-6 months of expenses in savings. This prevents using debt for emergencies.
Frequently Asked Questions
What is the 50/30/20 rule? ā¼
The 50/30/20 rule is a budgeting framework that allocates your after-tax income into three categories: 50% for needs (essential expenses), 30% for wants (discretionary spending), and 20% for savings and debt repayment. It was popularized by Senator Elizabeth Warren.
Is the 50/30/20 rule realistic for everyone? ā¼
Not always. Those in high cost-of-living areas may need 60% or more for needs. Low-income households may struggle to save 20%. The key is finding a split that works for your situationāour calculator offers 7 alternative rules.
How do I know if something is a need or want? ā¼
Ask yourself: "Can I survive without this?" Needs are essentials for basic livingāhousing, utilities, basic groceries, transportation to work, and minimum debt payments. Everything else is a want, including upgrades to necessities.
Should I include retirement contributions in savings? ā¼
Yes! Retirement contributions count toward your 20% savings target. If contributions are taken from your paycheck before you receive it, add them back when calculating your budget to get an accurate picture.
What if my needs are more than 50%? ā¼
If your essentials exceed 50%, look for ways to reduce them (refinancing debt, cheaper housing, lower insurance rates). Alternatively, use the 60/20/20 rule while working to lower your needs over time.
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