Budget Calculator
Type your monthly take-home pay. We will split it the 50/30/20 way - half for needs, 30% for wants, and 20% for saving and paying down debt - and flag any bucket your real spending blows through.
How the 50/30/20 rule works
Coined by Senator Elizabeth Warren in All Your Worth, the 50/30/20 rule is a one-paragraph budget. After tax, half your money goes to needs (rent, utilities, transportation, groceries, basic insurance, minimum debt payments). Thirty percent goes to wants (anything you could cut if you had to - dining, subscriptions, hobbies, premium phone plans). Twenty percent goes to saving and paying down debt above the minimum.
Why this one works when other budgets fail
Most budgets break because they try to track every Starbucks. The 50/30/20 rule does not care. It only asks "is the total in the right zone?" That makes it easy to stick with for months instead of days.
When the rule does not fit
- High cost-of-living areas. If rent alone is 45% of your take-home, you cannot squeeze the rest of "needs" into 5%. Adjust the percentages, not the categories.
- Debt emergencies. If credit cards are eating you alive, push the 20% bucket to 30% or 40% temporarily by cutting wants.
- Variable income. Run the calculator against your worst three-month average, not your best.
Next steps
- If "saving" is at zero, build a starter emergency fund first. Use the emergency fund calculator.
- If credit card debt is the issue, run the debt snowball.
- If you are saving but unsure where to put it, read Index Funds 101.