50/30/20 Budget Calculator

The 50/30/20 rule explained

The 50/30/20 rule is one of the simplest ways to budget a paycheck. Popularized by Senator Elizabeth Warren in All Your Worth, it divides your after-tax income into three buckets: 50% to needs, 30% to wants, and 20% to savings and debt paydown. Because there are only three numbers to track, it is easy to remember and hard to overthink—ideal for anyone who has bounced off more detailed budgeting systems.

How the math works

Needs   = monthly income × 0.50
Wants   = monthly income × 0.30
Savings = monthly income × 0.20

Enter a yearly salary and the calculator divides it by 12 to find your monthly take-home, then splits that. Prefer your own ratios? Switch on the custom split — they just have to add up to 100%.

Needs vs wants: the grey areas

• Needs are the costs you cannot easily skip: housing, utilities, groceries, insurance, transportation to work, and minimum debt payments.
• Wants are the upgrades and extras: takeout instead of groceries, the premium phone plan, streaming stacks, hobbies, and travel.
• The line is judgment, not science. A basic phone plan is a need; the unlimited-everything tier is a want. Be honest, but do not agonize.

Why savings comes first

The most durable version of this rule treats the 20% as a bill you pay yourself before anything else—ideally an automatic transfer on payday. Saving with whatever is "left over" almost never works, because there is rarely anything left. Funding the savings bucket first, then living on the rest, is the behavioral trick that makes the whole system hold. High-cost cities, aggressive debt payoff, and FIRE-style goals are all good reasons to deviate from the exact percentages.