How to Calculate Budget Using 50-30-20 Formula

Welcome to our 50-30-20 Budget Calculator, a simple tool designed to help you better manage your money. This calculator is based on the 50-30-20 rule, a popular budgeting method. But first, what is the 50-30-20 rule you ask?

OK. So, before we show you how easy it is to calculate, let’s talk about what the 50-30-20 rule is a straightforward, practical approach to personal budgeting. It suggests allocating 50% of your after-tax income for essentials, such as rent, groceries, and other necessary expenditures. The next 30% of your income should be dedicated to discretionary or non-essential expenses, often categorized as ‘wants.’ These may include entertainment, dining out, and personal hobbies. The remaining 20% of your income is intended for savings or paying off debts. This rule is lauded for its simplicity and adaptability, as it provides a clear framework for managing your finances and can be adjusted to suit various income levels and lifestyles.

Using the 50-30-20 rule can provide a host of benefits. It gives you a clear understanding of where your money goes and helps you identify areas where you can potentially save more. By categorizing your expenses into ‘needs,’ ‘wants,’ and ‘savings,’ you can prioritize your spending and make more informed financial decisions. Over time, this budgeting strategy can aid in achieving financial stability, building an emergency fund, and setting the stage for long-term financial growth.”

How To Use Our 50-30-20 Rule Calculator


Enter After-Tax Income

Start by entering your after-tax income into the 'After-tax Income' field. This is the total amount of money you bring home after all tax deductions are taken into account.



Upon hitting the 'Calculate' button, the calculator will automatically apply the 50-30-20 rule and provide you with the allocated amounts for your essentials (needs), discretionary spending (wants), and savings. Remember, these are just guidelines and can be adjusted based on your personal circumstances.


Change Your Life (or don't)

Lastly, compare these suggested amounts with your actual spending. This will help you see if you are overspending in certain areas and if there's an opportunity to adjust your expenses and save more. Over time, consider revisiting this calculator as your income or spending habits change. Ok. Good luck. No matter what we're not judging. We're just a calculator.


50. 30. 20. Let's Calculate.

50-30-20 Budget Calculator