What is the 50/30/20 budget?
The 50/30/20 rule is one of the simplest ways to budget. You split your monthly take-home pay into three buckets: 50% for needs, 30% for wants, and 20% for savings and paying down debt. It's popular because it's easy to remember and flexible enough for most incomes.
The split
Needs = 50% · Wants = 30% · Savings & debt = 20%
Each bucket is just your monthly take-home pay multiplied by 0.5, 0.3, and 0.2.
Worked example
On $3,000 take-home per month:
- Needs (50%): $1,500 — rent, food, bills, transport, insurance, minimum debt payments
- Wants (30%): $900 — dining out, subscriptions, hobbies, travel
- Savings & debt (20%): $600 — emergency fund, investing, extra debt payoff
How to use it
Enter your after-tax monthly income above and the calculator shows each target instantly. Treat them as starting points: if your rent is high, "needs" may run above 50%, so trim "wants" to protect your savings. The goal is a balanced plan you'll actually stick to, not perfect percentages.
Common mistakes to avoid
Using gross (pre-tax) income instead of take-home. Filing "wants" as "needs" (a subscription isn't a need). Saving only what's left at month-end instead of paying the 20% first. Giving up because needs exceed 50% — adjust the split rather than abandon budgeting.
Frequently asked questions
What counts as a "need" vs a "want"?
Needs are essentials: housing, groceries, utilities, transport, minimum debt payments, insurance. Wants are everything you could live without: dining out, streaming, travel, hobbies.
Take-home or gross income?
Take-home (after-tax) — the amount that actually lands in your account.
What if I can't save 20%?
Start with whatever you can — even 5% builds the habit. Then trim one "want" and redirect it to savings each month.
Does this work on any income?
It's a flexible guideline. In high-cost areas, needs often exceed 50%, so adjust while protecting some savings.
Where does debt repayment go?
Minimum payments are needs; extra payoff comes from the 20% savings-and-debt bucket.
Is my income saved anywhere?
No. Everything runs in your browser; nothing is uploaded.