Use this budget calculator to split your take-home pay with the 50/30/20 rule, then enter what you actually spend to see where you’re over or under. You can also try the 60/20/20 and 70/20/10 rules if you live in a high-cost area or carry a lot of fixed expenses.
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Target vs. your spending
Your budget breakdown
| Category | Target | You spend | Difference |
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Estimates only. Your numbers stay in your browser and are not saved or sent anywhere.
What is the 50/30/20 rule?
The 50/30/20 rule is a simple way to budget your after-tax income. It was popularized by Senator Elizabeth Warren and her daughter Amelia Warren Tyagi in their book All Your Worth. You divide your take-home pay into three buckets:
- 50% for needs: expenses you must pay, such as rent or mortgage, utilities, groceries, transportation, insurance and minimum debt payments.
- 30% for wants: things you could live without, such as dining out, entertainment, shopping, subscriptions and travel.
- 20% for savings and debt payoff: emergency savings, retirement contributions, investing and any debt payments above the minimum.
On $5,000 a month of take-home pay, that’s $2,500 for needs, $1,500 for wants and $1,000 for savings, or $12,000 a year.
50/30/20 budget examples
| Monthly take-home pay | Needs (50%) | Wants (30%) | Savings (20%) |
|---|---|---|---|
| $3,000 | $1,500 | $900 | $600 |
| $4,000 | $2,000 | $1,200 | $800 |
| $5,000 | $2,500 | $1,500 | $1,000 |
| $6,000 | $3,000 | $1,800 | $1,200 |
| $8,000 | $4,000 | $2,400 | $1,600 |
Example: when needs take more than half
The calculator’s default example takes home $5,000 a month. Rent is $1,600, and with utilities, groceries, a car, insurance and minimum debt payments, needs add up to $3,300, or 66% of pay. Wants come to $710 (14%) and savings to $600 (12%), leaving $390 a month unbudgeted.
Needs are $800 over the 50% target, and savings are $400 short of 20%. Moving the $390 of unbudgeted money into savings would bring them close to the goal. That kind of leftover money often disappears into small purchases if it doesn’t have a job.
What if 50% isn’t enough for your needs?
For many households, housing alone takes a big share. Housing made up 33.4% of the average household’s spending in 2024, and transportation another 17%, according to the Bureau of Labor Statistics. Together, that’s half of all spending before food or healthcare.
If your needs are over 50%, you have a few options:
- Use a different split. Try 60/20/20 to keep saving 20% while allowing more for needs, or 70/20/10 if your fixed costs are very high. Choose a rule in the calculator to compare.
- Cut wants first. Trimming dining out, shopping and subscriptions is usually easier than lowering rent.
- Lower your biggest fixed costs over time. Refinancing a mortgage or car loan, shopping for insurance, or finding a roommate can free up hundreds a month. See what a lower rate could save with our refinance calculator.
- Raise your income. A raise or side income can go straight to savings if you keep your spending the same.
Needs vs. wants: tricky cases
- Groceries are a need; restaurants are a want. Takeout and coffee shops belong in wants.
- A basic phone and internet plan is a need; premium upgrades and streaming services are wants.
- Minimum debt payments are needs; anything extra you pay to clear debt faster counts as savings.
- Retirement contributions taken from your paycheck count as savings. Add them back to your take-home pay so the percentages are accurate.
Putting your 20% to work
- Build a starter emergency fund so surprise bills don’t go on a credit card. Our savings goal calculator shows how long it will take.
- Get your full employer retirement match, since it’s free money.
- Pay off high-interest debt, starting with credit cards. Compare payoff methods with our debt payoff calculator.
- Save more for retirement and other goals. Check whether you’re on track with our retirement calculator.
Frequently asked questions
How does the 50/30/20 rule work?
You split your after-tax income into three parts: 50% for needs like housing, groceries and minimum debt payments, 30% for wants like dining out and entertainment, and 20% for savings and extra debt payments.
Is the 50/30/20 rule based on gross or net income?
Net income, meaning your take-home pay after taxes. If you contribute to a retirement plan through payroll, add that back to your take-home pay and count it as savings.
How much should I save if I make $5,000 a month?
Under the 50/30/20 rule, you’d save $1,000 a month, or $12,000 a year, including retirement contributions and extra debt payments. You’d spend up to $2,500 on needs and $1,500 on wants.
What if my needs are more than 50% of my income?
That’s common, especially in high-cost areas. Try a 60/20/20 or 70/20/10 split, cut back on wants first, and look for ways to lower your biggest fixed costs, like housing and transportation, over time.
Do debt payments count as needs or savings?
Minimum payments count as needs because you have to make them. Any amount you pay above the minimum counts toward the 20% for savings and debt payoff.
This calculator provides estimates for educational purposes only and is not financial advice. Source: Bureau of Labor Statistics: housing and transportation accounted for 50 percent of household spending in 2024.