Budget Calculator

Plan your monthly budget by tracking income and expenses across categories, with a 50/30/20 rule comparison to guide your spending and saving.

About this Calculator

Plan your monthly budget by tracking income and expenses across categories, with a 50/30/20 rule comparison to guide your spending and saving.

Formula & Calculations

Formula

Surplus = Income - (Housing + Food + Transportation + Utilities + Entertainment + Savings + Other); 50/30/20 Rule: Needs ≤ 50%, Wants ≤ 30%, Savings ≥ 20%

Where:

I=Monthly net income
H=Housing expenses (rent/mortgage)
F=Food and grocery expenses
T=Transportation costs
U=Utility bills
E=Entertainment and discretionary spending
S=Savings and investments
O=Other miscellaneous expenses

Assumptions

Uses net (take-home) income as the basis for budgeting.
Category definitions follow the 50/30/20 framework where housing, food, transport, and utilities count as needs.
Entertainment and other categories count as wants.
The 50/30/20 rule was popularized by Senator Elizabeth Warren's book 'All Your Worth'.

Calculation Examples

Example 1

Inputs:Income: $6,000, Housing: $1,800, Food: $600, Transport: $400, Utilities: $300, Entertainment: $300, Savings: $500, Other: $300

Result:Surplus: $800, Expense Ratio: 86.7%, Needs: $3,100 vs $3,000 target, Savings: $500 vs $1,200 target

Your needs are slightly above the 50% target and savings fall short of the 20% goal. The $800 surplus leaves room to increase savings.

Example 2

Inputs:Income: $4,000, Housing: $1,200, Food: $500, Transport: $200, Utilities: $250, Entertainment: $600, Savings: $200, Other: $400

Result:Deficit: -$350, Savings: $200 vs $800 target

You are spending more than you earn. Entertainment and other wants at $1,000 exceed the 30% guideline ($1,200), but combined with needs, total spending exceeds income.

Example 3

Inputs:Income: $8,000, Housing: $1,500, Food: $700, Transport: $300, Utilities: $200, Entertainment: $400, Savings: $2,000, Other: $200

Result:Surplus: $2,700, Savings: $2,000 vs $1,600 target

With strong income and moderate spending, you exceed the 20% savings target and have a healthy $2,700 surplus for additional investments or goals.

Frequently Asked Questions

What is the 50/30/20 budget rule?

The 50/30/20 rule allocates after-tax income into three categories: 50% for needs (housing, food, utilities, transportation), 30% for wants (entertainment, dining out, hobbies), and 20% for savings and debt repayment. It is a simple, flexible framework for budgeting.

How much of my income should I save each month?

Financial experts generally recommend saving at least 20% of your income, following the 50/30/20 rule. If you have high-interest debt, prioritize paying that off before building savings, and aim to have 3-6 months of expenses in an emergency fund.