50/30/20 Budget
Split your take-home pay into needs, wants, and savings — the simplest budget that actually sticks.
Use your after-tax pay — what actually lands in your account.
Needs = rent, groceries, utilities, minimum debt payments. Wants = dining out, subscriptions, travel. The 20% is non-negotiable — pay it first.
How to use this calculator
- Enter your monthly take-home payAfter-tax — what actually lands in your account.
- Read your 50/30/20 splitTargets for needs, wants, and savings & debt payoff.
- Automate the 20%Move it to savings the day you're paid, before you can spend it.
Most budgets fail because they are too complicated to maintain. The 50/30/20 rule survives because it is simple enough to actually follow: split your after-tax income into three buckets — 50% needs, 30% wants, 20% savings and debt payoff — and you have a plan you can run from memory.
What goes in each bucket
Needs (50%) are the things you genuinely cannot skip: rent or mortgage, groceries, utilities, insurance, transportation, and the minimum payments on any debt. Wants (30%) are everything that makes life enjoyable but optional: dining out, streaming, travel, hobbies. Savings and debt payoff (20%) is the bucket that builds your future — emergency fund, retirement contributions, and any extra debt payments above the minimum.
Why the 20% is non-negotiable
The savings slice is the one most people raid first, and it is exactly backwards. Pay it first — automate the transfer the day you are paid — so it is gone before you can spend it. The rule popularized by this framework treats that 20% as a bill you owe your future self.
Adjust for reality
In high cost-of-living cities, "needs" can eat well past 50%. That is fine as a diagnostic — if needs are at 65%, the rule has just told you the squeeze is structural (housing), not a coffee problem, and the fix is bigger (income or location), not guilt. Use the split as a target and a mirror, not a cage.
A worked example
On $4,500 of monthly take-home pay, 50/30/20 means about $2,250 for needs, $1,350 for wants, and $900 toward savings and debt. Adjust your income above to see your own targets.