The 50/30/20 budget was popularised by Senator Elizabeth Warren in “All Your Worth”. It is a simple starting point: in high-cost cities needs may take more than 50%, so adjust the percentages if necessary.
How to use the 50/30/20 Rule Calculator
- After-tax income
- Needs share
- Wants share
- Your actual monthly needs
- Your actual monthly wants
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter your after-tax income (choose the period) and, optionally, what you actually spend on needs and wants.
Inputs explained
| Field | What to enter |
|---|---|
| After-tax income | Units: per month, per year, per week, every two weeks |
| Needs share | In % |
| Wants share | In % |
| Your actual monthly needs | Amount in your currency |
| Your actual monthly wants | Amount in your currency |
What each result means
- Needs (monthly) = [After-tax income]×[Needs share]÷100
- Wants (monthly) = [After-tax income]×[Wants share]÷100
- Savings and debt repayment (monthly) = [After-tax income]×(100 – [Needs share] – [Wants share])÷100
- What’s left to save with your actual spending = [After-tax income] – [Your actual monthly needs] – [Your actual monthly wants]
- Your actual savings rate = ([After-tax income] – [Your actual monthly needs] – [Your actual monthly wants])÷[After-tax income]×100
- Yearly savings target = [After-tax income]×(100 – [Needs share] – [Wants share])÷100×12
Example values
How the main result changes when After-tax income changes and everything else stays at the example values above:
| After-tax income (per month) | Needs (monthly) |
|---|---|
| 2,250 | 1,125 |
| 3,375 | 1,687.5 |
| 4,500 | 2,250 |
| 5,625 | 2,812.5 |
| 6,750 | 3,375 |
| 9,000 | 4,500 |
Formula
Needs = 50% × after-tax income
Wants = 30% × after-tax income
Savings and extra debt payments = 20% × after-tax income
Worked example
Inputs: After-tax income: $4,500 per month; Needs share: 50 %; Wants share: 30 %; Your actual monthly needs: $2,500; Your actual monthly wants: $1,100.
Results: Needs (monthly) = $2,250.00; Wants (monthly) = $1,350.00; Savings and debt repayment (monthly) = $900.00; What's left to save with your actual spending = $900.00; Your actual savings rate = 20 %; Yearly savings target = $10,800.00.
Frequently asked questions
What counts as needs?
Housing, utilities, groceries, insurance, transport to work and minimum debt payments.
What counts as wants?
Eating out, entertainment, travel, hobbies and upgrades.
Is the 50/30/20 rule based on gross or net income?
Net (after-tax) income.
Guides on this topic
- How Much House Can I Afford? The 28/36 Rule With a Worked Example: Work out a realistic home budget with the 28/36 rule, debt-to-income ratio, down payment, PMI and closing costs, then stress-test it against take-home pay and higher rates.