50/30/20 Rule Calculator
Use the popular 50/30/20 budgeting rule to allocate your take-home pay. This simple method divides your income into needs (50%), wants (30%), and savings/debt (20%).
Budget Allocation
Needs (50%):
$0.00
Wants (30%):
$0.00
Savings/Debt (20%):
$0.00
Budget Analysis
Total Allocated:
$0.00
Unallocated:
$0.00
Budget Status:
Enter income
Understanding the 50/30/20 Rule
The 50/30/20 rule is a simple budgeting method popularized by Senator Elizabeth Warren. It divides your take-home pay into three categories: needs (50%), wants (30%), and savings/debt repayment (20%).
The 50/30/20 Breakdown
50%
Needs
Housing, utilities, groceries, transportation, insurance, minimum debt payments
30%
Wants
Dining out, entertainment, hobbies, vacations, shopping, subscriptions
20%
Savings & Debt
Emergency fund, retirement savings, extra debt payments, investments
Examples by Income Level
| Monthly Take-Home | Needs (50%) | Wants (30%) | Savings (20%) |
|---|---|---|---|
| $3,000 | $1,500 | $900 | $600 |
| $5,000 | $2,500 | $1,500 | $1,000 |
| $8,000 | $4,000 | $2,400 | $1,600 |
When to Adjust the Rule
Use Higher Savings % If:
- You have high-interest debt
- You want to retire early
- You have irregular income
- You live in a high-cost area
Use Lower Needs % If:
- You have low housing costs
- You earn above-average income
- You have no debt
- You want more lifestyle flexibility
Key Takeaways for 50/30/20 Rule
- The 50/30/20 rule provides a simple framework for budgeting
- Focus on needs first, then allocate to wants and savings
- Adjust percentages based on your financial situation and goals
- Track spending regularly to stay within your allocations
- Use the rule as a starting point, not a rigid requirement
- Consider your location, income stability, and financial goals
- The rule works best for those with steady, predictable income
- Combine with other budgeting methods for comprehensive financial planning