50/30/20 budget calculator
Split take-home pay into needs, wants and saving, then compare the split against what you actually spend now.
Target for saving each month
$1,300.00
20% of take-home pay — you are currently putting aside 700
- Needs (50%)
- $3,250.00
- Wants (30%)
- $1,950.00
- Unaccounted for
- $300.00
| Needs — target | $3,250.00 |
|---|---|
| Needs — actual | $3,400.00 |
| Wants — target | $1,950.00 |
| Wants — actual | $2,100.00 |
| Saving — target | $1,300.00 |
| Saving — actual | $700.00 |
- Money you cannot account for is usually the fastest saving available.
On $6,500 take-home the 20% saving target is $1,300 a month — most people discover they are closer to 10%.
Side by side
How this is calculated
The split
Half of take-home pay covers needs, 30% covers wants, 20% goes to saving and extra debt repayment. The three targets are allocated so they add to your income exactly, rather than each being rounded independently.
needs = 50% · net, wants = 30% · net, saving = 20% · netTake-home, not gross
The rule works on the money that reaches your account. Applying it to a gross salary overstates every category by whatever your tax rate is — at a 30% rate the needs budget would be 43% too generous.
Worked example: $6,500 take-home a month
| Take-home pay | $6,500 |
|---|---|
| Needs now | $3,400 |
| Wants now | $2,100 |
| Saving now | $700 |
| Needs target | $3,250 |
|---|---|
| Wants target | $1,950 |
| Saving target | $1,300 |
Needs are only $150 over. The whole gap is wants at $150 over and saving at $600 under — one category, not a spending problem everywhere.
What this assumes
- Income is after tax and payroll deductions.
- Minimum debt repayments count as needs.
- Extra debt repayment counts as saving.
- Employer pension contributions are excluded.
Where this commonly goes wrong
- Housing above 35% of take-home makes a 50% needs budget arithmetically impossible — the rule breaks before you do.
- Extra repayments on debt belong in the 20%, not the 50%: only the contractual minimum is a need.
- Annual bills — insurance, registration, subscriptions billed yearly — are needs that never appear in a monthly total until they hit.
Questions
What counts as a need versus a want?
A need is a payment that continues whether or not you have income and that you cannot easily cut: housing, food, utilities, transport, insurance, minimum debt payments. Everything else — including the good coffee and the streaming — is a want.
Does the 50/30/20 rule work on a low income?
Often not. When housing alone takes 45% of take-home, the needs half is gone before food. The rule is a target to move toward, and on a tight income the honest version is a smaller saving percentage than 20 until the income or the rent changes.
Should my mortgage count as a need or as saving?
The scheduled repayment is a need — you owe it. Extra repayments above the minimum are saving, because they build equity by choice. Splitting it that way stops an aggressive repayment plan from looking like overspending.
Where do employer pension contributions fit?
Outside the rule entirely. They never reach your take-home pay, so counting them as your 20% double-counts money you never had the chance to spend. Count only what you move yourself.
Is 20% saving enough for retirement?
It is a reasonable floor for someone starting in their twenties. Starting at forty, the same retirement usually needs closer to 30%, because there are half as many years for the balance to compound.
What if my categories do not add to my income?
The unaccounted-for figure is the most useful number on this page. Money you cannot name is almost always the cheapest saving available, and it is normally spread across small, frequent card transactions.
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Sources
This calculator does arithmetic on the figures you enter. It does not account for tax, fees, or your personal circumstances.
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