Budget Calculator
Income split across needs, wants and savings — the 50/30/20 rule, checked against what you actually spend.
The 50/30/20 rule allocates take-home pay: half to needs, 30% to wants, 20% to savings and debt repayment.
How the budget calculator works
The 50/30/20 rule allocates take-home pay: half to needs, 30% to wants, 20% to savings and debt repayment. It is a starting frame rather than a law, and it fails where housing costs are extreme.
What makes it useful is comparing it against your actual figures. The gap between the target split and the real one is usually where the problem is.
Formula: needs 50%, wants 30%, savings 20% of take-home pay
Worked examples
| Inputs | Unallocated each month | Note |
|---|---|---|
| 5,500 income, typical split | $200.00 | needs 58%, savings 13% |
| On target | $0.00 | exactly 50/30/20 |
| Overspending | -$500.00 | negative unallocated |
FAQFrequently asked questions
What is the 50/30/20 rule?
Half of take-home pay to needs, 30% to wants, 20% to savings and debt repayment.
Does it work everywhere?
Not where housing is extreme. In cities where rent alone takes 40% of income the split has to be redrawn — the framework still helps, the numbers do not.
What counts as a need?
Housing, food, utilities, transport, insurance and minimum debt payments. Anything you would still pay if your income halved.
Where does debt repayment go?
Minimum payments are needs; anything extra counts toward the 20%. Paying off a 20% credit card is one of the highest-return uses of that money.
What if I cannot reach 20%?
Start with anything. The habit matters more than the percentage, and the percentage rises as income does if spending does not follow it.
Where these figures come from
- CFA Institute — Quantitative Methods: The Time Value of Money — the discounting, annuity and IRR conventions used here
- US Federal Reserve — Regulation Z (Truth in Lending), APR calculation — why APR includes fees where a nominal rate does not
- Consumer Financial Protection Bureau — the US consumer finance regulator
Last checked: September 2026. These are the standard textbook formulas; the conventions named are those of the CFA Institute curriculum and ISO 80000 usage.