Free 50/30/20 Budget Calculator

The 50/30/20 rule is a simple budgeting guideline popularized by Senator Elizabeth Warren. It suggests dividing your after-tax (take-home) monthly income as follows: 50% on needs (essentials like housing, food, utilities), 30% on wants (lifestyle choices like dining out, hobbies, entertainment), and 20% on savings, investments, or extra debt repayment. It's designed to balance current enjoyment with future financial security.

Always use your net take-home pay — the amount that actually hits your bank account after taxes, insurance, retirement contributions, and other deductions. Using gross income would make the percentages unrealistic and lead to overspending on needs.

This is very common in high-cost cities or with large families. Try to gradually reduce needs (e.g., downsize housing, refinance loans, negotiate bills, add side income) while protecting at least some savings. In the short term, adjust to a 60/20/20 or 70/20/10 split using the custom option in this calculator — better than having zero savings.

Yes — especially employer-matched contributions. Pre-tax retirement deductions reduce your take-home pay, so they effectively come out of your "needs" or overall budget. Post-tax contributions (Roth IRA) and extra debt payments should go in the 20% savings/debt category. The goal is building long-term wealth and security.

Minimum required debt payments (credit cards, loans, student loans) belong in the 50% needs category because they're non-negotiable obligations. Any extra payments beyond the minimum count toward the 20% savings/debt payoff bucket to accelerate progress.

Absolutely — the 50/30/20 is a starting guideline, not a strict law. Use the "custom" option here to create your own split (e.g., 60/20/20 for high-cost areas or 40/30/30 if you're aggressively saving). The key is consistency, tracking actual spending, and ensuring savings/debt payoff isn't zero long-term.

No — the percentages apply only to your after-tax take-home pay. Taxes (and any pre-tax deductions like health insurance or 401(k)) are already subtracted before you start budgeting.

Needs are essentials required to live and function (rent/mortgage, utilities, basic groceries, transportation to work, minimum insurance, minimum debt payments). Wants are discretionary (dining out, streaming services, hobbies, vacations, new clothes, non-essential shopping). The line can be personal — coffee every day might be a "want" for some, a small "need" for others — but aim for honesty.

Review monthly when you get paid, and do a deeper check every 3–6 months or after major life changes (job switch, move, family addition). Track actual spending for 1–2 months first to see where reality differs from the plan, then tweak percentages or habits.

It can be a helpful starting framework, but many with lower incomes find needs exceed 50–60%. In those cases, prioritize covering basics first, then build a small emergency fund before focusing heavily on wants. The custom percentages in this tool let you adapt it realistically.