50 30 20 Budget Calculator
Allocate your income using the 50/30/20 rule: needs, wants, and savings/debt. Enter values for instant results with step-by-step formulas.
Reviewed by Sahil, Senior Finance & Tax Editor
Formula
Needs = Income x 50% | Wants = Income x 30% | Savings = Income x 20%
The 50/30/20 rule allocates after-tax income into three buckets: 50% for essential needs, 30% for discretionary wants, and 20% for savings and debt repayment beyond minimums.
Worked Examples
Example 1: $5,000/month After-Tax Income
Problem:Apply the 50/30/20 rule to $5,000 monthly take-home pay.
Solution:Needs (50%): $2,500 — Housing $1,125, Utilities $250, Groceries $500, Transport $375, Insurance $125, Min debt $125\nWants (30%): $1,500 — Dining $375, Entertainment $300, Shopping $300, Subscriptions $225, Hobbies $150, Personal care $150\nSavings (20%): $1,000 — Emergency fund $300, Retirement $400, Goals $200, Investments $100
Result:Needs: $2,500 | Wants: $1,500 | Savings: $1,000
Frequently Asked Questions
What is the 50/30/20 budget 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 (housing, food, utilities, insurance, minimum debt payments), 30% for wants (dining out, entertainment, hobbies, subscriptions), and 20% for savings and extra debt repayment. It provides a balanced approach to managing money without tracking every penny.
References
Reviewed by Sahil, Senior Finance & Tax Editor · Editorial policy