The 50/30/20 rule is the simplest way to budget. Enter your take-home pay and see exactly how much to allocate to needs, wants, and savings.
The 50/30/20 rule, popularized by Senator Elizabeth Warren in All Your Worth, splits your after-tax income into three buckets:
50% Needs: Essential expenses you can't avoid — housing, groceries, utilities, insurance, minimum debt payments, and transportation.
30% Wants: Non-essential spending that makes life enjoyable — dining out, entertainment, subscriptions, shopping, and vacations.
20% Savings & Debt Payoff: Building your financial future — emergency fund, retirement contributions, extra debt payments, and investments.
This calculator uses your take-home (after-tax) income — the amount that actually hits your bank account each month. If you're not sure, check your last pay stub for the net amount.
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