50/30/20 Rule Calculator
Create a balanced budget with the 50/30/20 rule: 50% needs, 30% wants, 20% savings
50/30/20 Budget Calculator
Choose how you want to calculate your budget allocation
Your monthly income after taxes and deductions
50/30/20 Budget Breakdown
Budget Breakdown Details
Budget Rule Validation
Example Calculation
Professional's Budget Example
Monthly after-tax income: $4,500
50% for necessities: ($4,500 × 50) ÷ 100 = $2,250
30% for wants: ($4,500 × 30) ÷ 100 = $1,350
20% for savings: ($4,500 × 20) ÷ 100 = $900
Budget Categories
Necessities ($2,250): Rent, groceries, utilities, insurance, minimum debt payments
Wants ($1,350): Dining out, entertainment, gym membership, streaming services
Savings ($900): Emergency fund, retirement, additional debt payments, investments
Budget Categories
Necessities
Rent, groceries, utilities, insurance
Essential expenses you can't avoid
Wants
Entertainment, dining out, hobbies
Discretionary spending for enjoyment
Savings
Emergency fund, retirement, debt
Building financial security
Necessities Examples
Budget Tips
Use after-tax income for calculations
Adjust percentages based on your situation
Track spending to validate your budget
Build emergency fund first
Review and adjust monthly
Understanding the 50/30/20 Rule
What is the 50/30/20 Rule?
The 50/30/20 rule is a simple budgeting framework popularized by Senator Elizabeth Warren. It divides your after-tax income into three categories: 50% for needs, 30% for wants, and 20% for savings and debt repayment.
Why Use This Rule?
- •Simple and easy to follow
- •Ensures balanced financial priorities
- •Promotes consistent saving habits
- •Allows for lifestyle enjoyment
When to Adjust the Rule
- High Cost of Living: May need more than 50% for necessities
- Low Income: Focus on necessities first, adjust savings
- High Debt: Increase savings allocation for debt payoff
- High Income: Consider increasing savings beyond 20%
Alternative Budget Rules
- 70/20/10 Rule: 70% spending, 20% savings, 10% giving
- 80/20 Rule: 80% spending, 20% savings (simpler)
- 60/40 Rule: 60% fixed expenses, 40% flexible spending