50/30/20 Budget Calculator

The 50/30/20 is a simple budgeting strategy designed to work for almost anyone. It takes a person’s net income (money after taxes) and splits it into three categories: needs, wants, and savings. With the Lendstart 50/30/20 budget calculator, you can easily make a budget that fits your finances.

50/30/20 calculator

Monthly after-tax income

Needs

$2,891.50

Wants

$1,734.90

Savings and Debt Repayment

$1,156.60

How to Use a 50/30/20 Budget Calculator

First, you’ll need your total net income – your take-home pay. Input this number into the “Monthly after-tax income” section of the calculator.
The calculator will automatically break down your income into the following categories:

Needs: This refers to any essential spending. It includes rent, mortgage, groceries, utilities, and other regular bills.
Wants: This refers to things you want but don’t have to have. It includes entertainment, recreation, splurges, and other non-essentials. It also includes such extras as dining out or luxury purchases.
Savings and Debt Repayment: This indicates how much money should go toward savings, repaying debt, or other financial goals (ex. preparing for retirement). It can also include an emergency fund.

50/30/20 Formula

The formula for calculating the 50/30/20 budget is as follows:

N = I x 0.50
W = I x 0.30
S = I x 0.20

Here’s the variable breakdown:

N = Needs or essentials
W = Wants or non-essentials
S = Savings or debt
I = Income (take-home pay after taxes)

You can use the calculator to budget for the current and future months. If your income changes significantly, input the new amount in the calculator to see where your money should be going.

50/30/20 Budget Rule Examples

	Example A	Example B	Example C
After-tax Income (monthly)	$5,000	$8,000	$15,000
Breakdown	50% - Needs 30% - Wants 20% - Savings	50% - Needs 30% - Wants 20% - Savings	50% - Needs 30% - Wants 20% - Savings
Money for Needs:	$2,500	$4,000	$7,500
Money for Wants:	$1,500	$2,400	$4,500
Money for Savings:	$1,000	$1,600	$3,000

Depending on your income and expenses, you might need to adjust the numbers from month to month until you find what works for you.

Why Use a 50/30/20 Budget Calculator

This budget calculator can help in the following ways:

It’s easy to use for beginners and experts at budgeting. It only requires a single input – income after-tax. It fills out the rest automatically, making it easy to understand and follow.
It gives exact amounts. The calculator can separate your income into three categories with clear amounts. This takes out the guesswork of budgeting.
It creates a basic framework for future budgeting. Using the calculator can give you a baseline of where your money should go. However, you can adjust it, if needed. The 50/30/20 rule is a solid foundation for more advanced budgets later.

Budget Rule FAQ

Is 50/30/20 after taxes?

Yes, the 50/30/20 rule is based on your after-tax income. This means that you would use your take-home pay, or the amount of money you receive after taxes have been taken out, to divide into the three categories.

When using the 50-30-20 rule to budget, what category are loan payments in?

Loan payments are typically considered a need, as they are a necessary expense. This means that they would fall under the 50% of your income that is allocated to needs.

Who created the 50/30/20 rule?

The 50/30/20 rule was created by Elizabeth Warren and her daughter, Amelia Warren Tyagi, in their book All Your Worth: The Ultimate Lifetime Money Plan.

Why is the 50/20/30 rule easy to follow?

The 50/20/30 rule is easy to follow because it is simple and straightforward. It only has three categories, and the percentages are easy to remember. This makes it a good starting point for people who are new to budgeting.

If you used the 50-30-20 rule of budgeting, how much money would you be saving?

If you used the 50-30-20 rule of budgeting, you would be saving 20% of your income. This is a good amount to save, and it can help you reach your financial goals, such as saving for retirement or a down payment on a house.