50/30/20 Budget Calculator
The 50/30/20 rule is a simple, proven budgeting framework popularized by Senator Elizabeth Warren in her book 'All Your Worth.' It divides your monthly after-tax income into three categories: 50% for needs (essentials like rent, utilities, and groceries), 30% for wants (discretionary spending like dining out and entertainment), and 20% for savings and debt repayment.
By automatically splitting your paycheck into these three buckets, you create a balanced financial plan without tracking every single expense. Enter your monthly take-home pay below to instantly see how much you should allocate to each category, helping you build long-term financial health while still enjoying your money today.
How it works
Needs = Income × 0.50 | Wants = Income × 0.30 | Savings = Income × 0.20. The three proportions always sum to 100% of after-tax income.
Use cases
- Planning a monthly household budget from a salary or freelance income
- Checking whether your current spending on essentials is within healthy bounds
- Setting savings targets aligned with a financial independence goal
- Helping a student or young professional build their first budget
- Comparing take-home pay across different currencies or job offers