If you’re looking for an easy way to figure out how much money you should be spending on your needs, wants, and savings or retirement, this 50 30 20 budget calculator is what you need!
Simple 50/30/20 Calculator
To begin, enter your monthly take-home pay in the calculator below. The results will tell you how much of your take-home pay you should be budgeting for your:
- Savings, Retirement, or Paying Off Debt
50/30/20 Budget Calculator
A simple guide to manage your money with the 50/30/20 rule
Enter your monthly take-home pay
Your Budget For:
|Necessities : $0.00|
|Wants : $0.00|
|Savings and paying off debt : $0.00|
What Is A 50/30/20 Budget?
A 50/30/20 budget is a simple formula that divides up your take-home pay into easy-to-understand chunks. This budget puts a focus on your needs, wants, and savings.
What You Should Do With Your Results
After receiving your ideal percentages from the calculator, follow this rule to divide your monthly budget into the proper areas to avoid overspending.
Needs Should Be 50%
After you have your own 50/30/20 budget numbers from the calculator, look at your 50% needs category. Then, when you sit down to do your budget, make sure your needs don’t exceed your 50% number. For a reminder, needs are comprised of:
- Food (not including eating out at restaurants)
- Clothing (basic clothing – not the latest pair of Jordan’s)
- Transportation (this could even be by bus or bicycle – not a BMW lease payment)
- Utilities (water, gas, electric)
- Minimum Debt Repayments (minimum payments needed to fulfill debt obligations such as credit cards)
- Child Support
Pretty much anything outside of these areas are more than likely going to fall into the want category.
Wants Should Be 30%
Take your personal want number and make sure you can fit all of your wants within this budgeted amount. If you can’t, you either need to increase your income or cut back on some of your wants.
In this process, be honest with yourself. Are the things in your want category bringing any value to your life? This is the place where you can make the biggest impact on your money and your life.
Narrow your wants down to things that truly add value to your life.
Typical wants include:
- Monthly Subscriptions
- Daily Starbucks Habit
Savings Should Be 20%
In the most basic structure, you should be saving 20% of your income for retirement. However, many people still have crippling debt that is keeping them from saving.
If you have credit card debt or other consumer-type debt, try to reduce your spending on wants and allocate more money to the savings category. Then, use the money designated to saving to get yourself out of debt as soon as possible.
If you need help and live paycheck to paycheck, check out my related article about these simple steps you can take to get out of debt.
I also wrote a more detailed article on the 50/30/20 monthly budget that you can read here.