Enter your monthly take-home pay (after taxes). The calculator applies the 50/30/20 rule to allocate your income into three categories: Needs (50%), Wants (30%), and Savings & Debt Repayment (20%).

Customize the percentages to match your personal situation. You'll see exactly how much to allocate to each category and the annual totals.

The 50/30/20 rule, popularized by Senator Elizabeth Warren in her book All Your Worth, is one of the simplest and most effective budgeting frameworks. It gives you structure without requiring you to track every penny.

The Three Buckets

50% — Needs: Essential expenses you can't avoid: housing (rent/mortgage), utilities, groceries, health insurance, minimum debt payments, transportation to work, and childcare. If these exceed 50%, you may be house-poor or carrying too much debt.

30% — Wants: Non-essential spending that enhances your life: dining out, entertainment, subscriptions, hobbies, vacations, shopping, gym memberships, and upgrades (choosing a premium phone over a budget option). This is where lifestyle inflation hides.

20% — Savings & Debt Repayment: Building your future: retirement contributions, emergency fund, extra debt payments (above minimums), and saving for goals (down payment, vacation, etc.). This bucket is what determines your long-term financial health.

When 50/30/20 Doesn't Work

In high-cost-of-living areas, housing alone may consume 30-40% of income, making the 50% needs target unrealistic. In that case, consider a modified ratio like 60/20/20 or focus on the 20% savings floor as the non-negotiable benchmark. If you're aggressively paying off debt, you might temporarily shift to 50/20/30 (swapping wants and savings).