How to Use This Budget Planner

Enter your monthly after-tax income (take-home pay)
See your budget automatically allocated using the 50/30/20 rule
50% goes to needs (housing, food, utilities, insurance)
30% goes to wants (entertainment, dining, hobbies)
20% goes to savings (emergency fund, retirement, debt payoff)

Understanding the 50/30/20 Rule

What is the 50/30/20 Rule?

The 50/30/20 rule is a simple budgeting framework that divides your after-tax income into three categories: 50% for needs, 30% for wants, and 20% for savings and debt repayment. Created by Senator Elizabeth Warren, it provides a balanced approach to managing money without obsessive tracking.

50% Needs - Essential Living Expenses

Needs are expenses you can't avoid: rent/mortgage, utilities, groceries, transportation, insurance (health, auto, home), minimum debt payments, and childcare. If your needs exceed 50%, look for ways to reduce: get a roommate, move to a cheaper area, use public transit, or switch to a cheaper phone plan. Needs should never include restaurants, cable TV, or gym memberships.

30% Wants - Lifestyle Choices

Wants are things you choose to spend on: dining out, entertainment, hobbies, subscriptions (Netflix, Spotify), shopping, vacations, and upgrades. This is where most people overspend! Track wants for a month to see where money goes. Common culprits: daily coffee ($150/month), food delivery apps ($200+/month), and unused subscriptions ($50+/month). Cutting just a few wants can fund significant savings.

20% Savings - Building Your Future

Savings includes: emergency fund (3-6 months expenses), retirement contributions (401k, IRA), investment accounts, extra debt payments beyond minimums, and saving for goals (house down payment, car). Prioritize in this order: 1) $1,000 starter emergency fund, 2) employer 401k match, 3) high-interest debt, 4) full emergency fund, 5) retirement (15% of income), 6) other goals. If 20% seems impossible, start with 10% and increase 1% every few months.

Frequently Asked Questions

What if my needs exceed 50%?

Many people, especially in high-cost areas, struggle with this. Options: increase income through a side job or raise, reduce housing costs (get roommates, move to cheaper area), cut transportation costs (public transit, bike), or reduce other needs. Also ensure you're categorizing correctly – gym memberships and premium phone plans are wants, not needs.

Should I include debt payments in needs or savings?

Minimum debt payments go in needs (you must pay them). Extra payments beyond minimums go in savings/debt repayment category. For high-interest debt like credit cards, prioritize paying extra in your 20% savings category before investing.

Can I adjust the 50/30/20 percentages?

Yes! The rule is a guideline, not law. In expensive cities, you might do 60/20/20. If you're aggressively saving for a goal, try 50/20/30. The key is finding a sustainable balance that lets you cover essentials, enjoy life, and build wealth. Track your spending for 2-3 months to find your reality, then adjust toward the 50/30/20 ideal.

Is this tool free to use?

Yes! This budget planner is completely free with no hidden costs, subscriptions, or limitations. Use it to plan your financial success.

Is my data private?

Absolutely. All calculations are performed locally in your browser. Your financial information never leaves your device and is not stored on any server.

📊 Budget Planner