Allocate your income using the 50/30/20 budgeting rule.
Enter your monthly after-tax income. Set the percentage you want to allocate to needs (housing, food, utilities), wants (dining out, entertainment, hobbies), and savings (emergency fund, investments, debt payoff).
The default split follows the popular 50/30/20 rule, but you can adjust percentages to fit your situation. The three percentages should add up to 100%.
Click Calculate to see the dollar amount for each category.
Budget allocation formula:
Category Amount = Monthly Income × (Category Percentage / 100)The 50/30/20 rule suggests: 50% for needs, 30% for wants, and 20% for savings and debt repayment.
Example: Monthly income of $5,000 using the 50/30/20 rule:
Example 2: $3,500 income with a 60/20/20 split:
The 50/30/20 rule is a budgeting guideline where 50% of after-tax income goes to needs (essentials), 30% to wants (non-essentials), and 20% to savings and debt repayment. It was popularized by Senator Elizabeth Warren.
Needs are essentials you cannot avoid: housing, groceries, utilities, insurance, minimum debt payments, transportation. Wants are non-essentials: dining out, entertainment, vacations, gym memberships, streaming services.
Many people in high cost-of-living areas spend more than 50% on needs. Adjust the percentages to be realistic — perhaps 60/20/20 — and look for ways to reduce fixed costs like housing, or increase income over time.