Educational content only — not personalized financial, legal, or tax advice.

50/30/20 Budget Calculator

By FiscallyAI Editorial (AI-assisted) • Updated 2026-02-19 • Educational tool

Enter your monthly take-home pay to see how the 50/30/20 rule splits your income.

After taxes, before deductions like 401(k)

Your 50/30/20 Budget

Needs (50%) $2,000

Rent, utilities, groceries, insurance, minimum debt payments, transportation

Wants (30%) $1,200

Dining out, entertainment, hobbies, subscriptions, shopping

Savings & Debt (20%) $800

Emergency fund, retirement, extra debt payments, investments

Visual Breakdown

Needs Wants Savings

What Is the 50/30/20 Budget Rule?

The 50/30/20 rule is a simple budgeting framework popularized by Senator Elizabeth Warren. It divides your after-tax income into three buckets:

  • 50% for needs — Essential expenses you can't avoid
  • 30% for wants — Discretionary spending that makes life enjoyable
  • 20% for savings & debt — Building your future and paying down debt

What Counts as "Needs"?

Needs are expenses you must pay to live and work. If you lost your job tomorrow, these would still be required:

  • Rent or mortgage
  • Utilities (electricity, water, gas)
  • Basic groceries (not eating out)
  • Health insurance and medications
  • Minimum debt payments (credit cards, student loans)
  • Transportation (car payment, gas, public transit)
  • Phone and internet (if required for work)

What Counts as "Wants"?

Wants are optional — nice to have, but you could live without them:

  • Dining out and takeout
  • Streaming subscriptions (Netflix, Spotify, etc.)
  • Entertainment (movies, concerts, gaming)
  • Shopping for non-essentials
  • Gym memberships
  • Vacations and travel
  • Hobbies

What Goes in the 20% Bucket?

This is where you build wealth and get out of debt faster:

  • Emergency fund contributions
  • Retirement accounts (401k, IRA)
  • Extra debt payments (above minimums)
  • Investing (index funds, stocks)
  • Saving for specific goals (down payment, car)

What If My Numbers Don't Fit?

Reality check: 50/30/20 is a guideline, not a law. If you live in a high-cost city, your needs might be 60% or 70%. That's okay. The goal is awareness and intentionality, not perfection.

Common Scenarios

  • High cost of living: Needs at 60%? Reduce wants to 20%, keep savings at 20%
  • Low income: Needs at 80%? Focus on increasing income first, then optimize
  • Aggressive debt payoff: Temporarily shift wants into savings/debt
  • High savings rate: If you can save 30%+ while meeting needs, go for it

Pros and Cons

Pros Cons
Simple to understand May not work for low or very high incomes
Flexible framework Doesn't account for location cost differences
Automatically prioritizes savings "Needs" vs "wants" can be subjective
Works as a starting point Not detailed enough for complex situations

Next Steps

  1. Calculate your actual current spending for one month
  2. Compare it to the 50/30/20 breakdown
  3. Identify where you're over/under
  4. Adjust gradually — don't overhaul everything at once
  5. Track monthly to stay accountable

Disclaimer: This calculator is for educational purposes only. Your actual budget should reflect your unique situation. Not financial advice.