Monthly budget

How this calculator works

The 50/30/20 guideline splits take-home pay into 50% for needs such as housing, utilities, groceries, insurance, and minimum debt payments, 30% for wants, and 20% for savings and extra debt payoff. It is a starting framework, not a rule: in high-cost areas needs often run higher, and people catching up on retirement may save more. Listing each bill separately shows exactly where your needs money goes and which category is the easiest to trim.

A worked example

The example numbers describe a household that takes home $6,000 a month. Its bills add up like this: $150 in credit card minimums, $2,150 for rent and a loan, $430 for five utilities, $180 for gas, $550 for three insurance policies, and $600 for groceries. That is $4,060 in needs, or 68% of take-home pay, against a 50% target of $3,000.

Wants are $1,000 (17%, well under the 30% target of $1,800) and savings are $800 (13%, short of the 20% target of $1,200). Everything together comes to $5,860, so the household is within budget by $140. The result is marked as a caution anyway, because needs are over half of income and savings are under 20%.

How to read your results

Start with the first three rows. Each one shows your dollars, your share of take-home pay, and what the guideline would allow, so you can see at a glance which of the three buckets is out of line. Below them, every category is shown as a share of your needs. In the example, loans and rent are 53% of all needs, which tells you that housing, not utilities or groceries, is where the pressure comes from.

The "Biggest bills" row names your three largest individual lines. If you are over budget, those are the ones worth a phone call: a cheaper insurance quote, a refinanced loan, or a different phone plan moves the total far more than trimming ten small items.

Common mistakes to avoid

• Using gross pay. The guideline is built on take-home pay, the amount that actually lands in your account. If you enter your salary before taxes, every percentage will look better than it really is.
• Counting the same dollar twice. If groceries go on a credit card that you pay in full, they are part of the card payment. Enter here only the card's minimum payment and the things you pay some other way.
• Leaving out yearly bills. Property tax, car registration, and insurance paid once or twice a year still belong in a monthly budget. Divide each by 12 and add a line for it.
• Treating 50/30/20 as a pass or fail test. In an expensive city, needs of 60% can be perfectly reasonable. What matters is knowing the number and deciding on purpose.