KnowWiser

Money tools

Budget Calculator (50/30/20 and custom)

Turn your monthly take-home pay into three numbers you can actually follow: needs, wants, and savings. Start from the 50/30/20 rule, adjust the split, and check whether your essential bills fit.

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Split totals 100%

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Itemize your needs (optional)
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How this calculator works

Each bucket is a straight percentage of your monthly after-tax income:

Bucket = Income × Percentage ÷ 100, with Needs% + Wants% + Savings% = 100

The default 50/30/20 split gives half of your income to needs, 30% to wants, and 20% to savings and extra debt payments. If you itemize your needs, the calculator adds them up and compares the total to the needs bucket, so you can see how far over or under you are in dollars and as a share of income.

Worked example

On $5,000 a month after tax, 50/30/20 gives $2,500 for needs, $1,500 for wants, and $1,000 for savings and debt. Itemize $1,600 rent, $200 utilities, $500 groceries, $300 transport, $150 insurance, and $100 in minimum debt payments and your needs come to $2,850 — $350 over the bucket, or 57% of income. Switching to a 60/20/20 split makes room ($3,000 for needs) while keeping savings intact.

Tips to make the split work

  • Move your savings automatically on payday, before wants get a chance at the money.
  • Housing is the lever that matters. Keep rent or mortgage under about 30% of take-home pay if you can.
  • Review the split every three months, or whenever income or rent changes.
  • Read the full story behind the rule in The 50/30/20 budget rule, then fill the savings bucket with an emergency fund first.
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Frequently asked questions

What is the 50/30/20 rule?

A simple budget framework: spend about 50% of after-tax income on needs (housing, utilities, groceries, transport, insurance, minimum debt payments), 30% on wants (dining out, travel, subscriptions, hobbies), and put 20% toward savings and extra debt payoff. It is a starting point, not a law — adjust the split to your situation.

What counts as a need versus a want?

A need is a bill you cannot skip without real consequences: rent or mortgage, utilities, basic groceries, commuting costs, insurance premiums, and the minimum payment on every debt. Upgrades within those categories — a bigger apartment, takeout instead of groceries, a nicer car — are wants even though the category sounds essential.

My needs are more than 50%. What should I do?

This is common in high-cost cities and on lower incomes. First borrow from the wants bucket rather than savings. Then look at the two biggest levers: housing (roommates, a cheaper lease when it renews) and transport (a cheaper car or none). Even a 70/20/10 split is a real budget if you stick to it.

Should the 20% go to savings or debt?

Both — in order. Build a small emergency fund first (one month of needs), then attack high-interest debt above roughly 8%, then finish the emergency fund and invest, especially up to any 401(k) match. Minimum debt payments belong in needs; anything above the minimum belongs here.

Should I use gross or after-tax income?

After-tax (net) income — the money that actually reaches your account. If you are salaried, use our Take-Home Pay Calculator to estimate it. If you contribute to a 401(k) through payroll, count that as savings you have already done.