50/30/20 Budget Calculator
Split your income into needs (50%), wants (30%), and savings (20%).
The 50/30/20 Budget Rule
The 50/30/20 rule is a simple budgeting framework popularized by Senator Elizabeth Warren. You split your after-tax income into three buckets: 50% needs (essentials you cannot easily skip—housing, utilities, groceries, insurance, minimum debt payments), 30% wants (discretionary spending—dining out, entertainment, subscriptions, hobbies), and 20% savings (emergency fund, retirement, extra debt payoff, other goals). Our calculator takes your monthly income and shows the dollar amount for each bucket, plus annual savings. The rule is a guideline, not a law—in high-cost areas, needs might exceed 50%, so you may trim wants or find ways to boost income to protect the 20% savings.
Why the 20% matters most
The 20% savings slice is what builds your emergency fund, retirement nest egg, and down payment. If you are not hitting 20%, look for levers: reduce wants, lower needs (e.g., smaller housing, fewer cars), or increase income. Use our emergency fund calculator to see how much to hold in cash, and our retirement savings goal and retirement calculator to see how that 20% translates into retirement security.
Needs vs wants: a quick guide
Needs are must-haves: rent or mortgage, utilities, groceries, health insurance, car payment if you need the car for work, minimum loan payments. Wants are everything else that makes life enjoyable but is not strictly necessary: streaming, gym, travel, eating out, upgraded phone plan. Different people draw the line differently—the goal is to be honest so your 50% needs category does not creep into 70% and squeeze out savings.
50/30/20 Budget FAQ
50% of after-tax income for needs (essentials), 30% for wants (discretionary), and 20% for savings and debt repayment. It is a simple guideline to balance spending and saving. Adjust as needed—e.g., in expensive areas you might have 60% needs and 10% wants to still save 20%.
It is based on after-tax (net) income—what actually hits your bank account. If you save via payroll (e.g., 401k), one approach is to use take-home pay and count the 401k as part of the 20% savings so you are not double-counting.
In high-cost areas or with high debt, needs can exceed 50%. Try to cap wants and protect at least 10–15% savings; look for ways to reduce needs (roommate, cheaper car, refinance) or increase income so you can get closer to 20% savings over time.
Plan Your Full Retirement
Use our retirement calculator for Monte Carlo simulations and country-specific planning.
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