50/30/20 Budget Calculator

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Budgeting without a plan is a dream, and most likely will throw you up and down in waves like a small raft in heavy storms if you don’t have one. If you want to control your finances, try becoming a better budget planner with a 50/30/20 calculator. The easiest way to start is by assessing your current financial situation and put it in the 50/30/20 budget calculator to see how you’re doing. Use your numbers to see how to spread your income the right way.

50/30/20 Budget Calculator

“Save money and money will save you!”

The budget rule 50/30/20 was introduced in 2005 by an American senator Elizabeth Warren when she published a book: “All Your Worth: The Ultimate Lifetime Money Plan”. Today, it is a widely known money management rule used by many individuals in personal finance budgeting.

Budget categories

The basic principle is to spread your after-tax income into three main budget categories: 50% on needs, 30% on wants and 20% on savings. Many people worry about where they spend money and whether they do it right. It’s great peace of mind if you’ve taken care of your financial obligations and savings beforehand because you know how much and what you can afford. Let’s take a closer look at each category and what comes in it.

Needs budget – 50%

Needs is the biggest category of all. These are your obligations and things that you cannot usually avoid:

  • Mortgage (The minimum monthly payment)
  • Rent
  • Utilities (Electricity, gas, repairs, trash, etc.)
  • Insurance (House insurance, personal insurance, car insurance, etc.)
  • Groceries
  • Phone bills
  • Loans (I.e. Study loans, car loans, etc.)
  • Childcare
  • Healthcare
  • Etc. 

Wants budget – 30%

The coolest part of your budget. This part goes to pleasure, hobbies, style, beauty etc. Here are some of the examples:

  • Clothes
  • Improvements (Better phone, furniture, house improvements, etc.)
  • Dining out (Restaurants, cafes, fast food, etc.)
  • Gifts
  • Charity
  • Movies
  • Vacations
  • Better lifestyle
  • Shopping
  • Etc.

Savings budget – 20%

This budget takes care of your future and provides you with a peach of mind in case of emergencies. A proper savings plan is often the reason what helps people achieve financial independence and allow them to retire early. If you plan your savings early, you may realise that in 15 years or even less, your passive income surpasses your income from your day job.

Here are some examples of savings:

  • Emergency fund
  • Extra debt payments (I.e. Paying an additional amount of mortgage than a monthly minimum)
  • Banks savings
  • Mutual funds
  • Stock markets
  • P2P investments
  • Individual retirement account (IRA) contributions
  • 401k contributions
  • Etc.

50/30/20 Budget example

Family of three.

Once you get into the habit to spread your income into three ways, you’ll feel safer, more stable and in balance with your financial decisions. Here’s an example on how would look like a 50/30/20 budget for a family of 2 parents and a child:

  • Let’s assume that both parents together are making around 4,000 EUR or USD a month after-tax.
  • The family already has an emergency fund worth 6,000 EUR or USD.
  • This means that the desired distribution of money would be: Needs – 2,000, Wants – 1,200 and Savings 800.
TypeAmountPercent of total income
Mortgage payment3809,50%
Utilities1503,75%
Groceries40010,00%
Childcare3508,75%
Insurance902,25%
Transport2506,25%
Accounting601,50%
Education1203,00%
Healthcare802,00%
Phone & Internet451,13%
Total in the ‘Needs’ category:1,92548,13% (50% max.)
TypeAmountPercent of total income
Dining out1604,00%
Entertainment & Hobbies1704,25%
Gifts1002,50%
Travelling2005,00%
House improvements701,75%
Clothing1604,00%
Memberships250,63%
Other expenses501,25%
Total in the ‘Wants’ category:93523,38% (30% max.)
TypeAmountPercent of total income
Extra mortgage payments2506,25%
Stock markets3508,75%
P2P investments2005,00%
Total in Savings category:80020,00% (20% max.)

You will have your own expense categories. These are just example numbers to illustrate how could it look in the end. In the example above, you can see that there’s some money left after all the expenses. The family spent 3,660 (EUR or USD) per month and it’s 91,50% of all the income. It’s up to you to decide whether you want to contribute more to your savings account or maybe put it aside for a trip. The main thing is that you deduct your regular expenses and savings once you receive your payment right away.

50/30/20 Budget excel spreadsheet template

If you’re done playing with numbers in our calculator above and want to make things serious, we offer a free 50/30/20 budget excel spreadsheet for download below. Feel free to edit as you wish and save it for personal use. Both 50/30/20 budget excel templates have the same features and offer a more in-depth analysis of your expense categories. These excel templates will help you understand your daily spending. Have fun!

Most popular budget apps

Most popular budget apps If you’d like to automate your budgeting and take it to the next level, some widely known apps could help you with that. Make the budgeting process quicker and easier. These apps will help you to divide your income, allocate your expenses to categories of your preferences and monitor your finances at any time.

NerdWallet – offer a complete overview of your income, bills and transactions in one place.

PocketSmith – is a personal finance app that helps to monitor your finances and track your expenses.

Quick tips on budgeting

  • Try to allocate each spending category on separate accounts to make it easier to keep track of your funds.
  • If you don’t have an emergency fund, make sure to create it. A good rule of a thumb is that it should cover at least three months of your needs. If it’s less than that or you had an emergency, first, top up the emergency fund before you turn back on investments or other types of savings.
  • Use the 50/30/20 budget calculator on all of your income, i.e. when you sell some of your old stuff or get a bonus at work. Save the tool as a bookmark so that you could easily access it when you receive your next payment and you need to budget it. 
  • After some time, you’ll start seeing patterns in your finances and where to save on costs.
Why is it crucial to create a budget plan?

Without a budget plan, it’s tough to stay on top of your finances and track your expenses. Often, it is even difficult to decide if your next purchase is a good or bad idea. With a proper finance plan, you’ll have an easy system in place to make educated financial decisions. With 50/30/20 rule budget you prepare yourself for unexpected emergencies, take care of your retirement and all in all, it’s fun to watch how your money works for you.

What to do if my income is not high enough to defer 20%?

If you find yourself in a situation where you can’t afford to put off 20% of your income, try to adjust the model to a smaller percentage in the beginning. I.e. At least 5%. And try to look at this model as a goal you need to achieve. Once you achieve it, try to stick to it as long as possible.

I’m a freelancer or businessman, I don’t make equal income every month. What to do?

Perfect, it means that you may have months where your income is higher than you need and vice versa. Just use this calculator for each payment you receive and stick to the model if you can.

Martin Kaiser

Editor-in-Chief on Globe Funder with more than 10 years of experience in the personal finance and business fields. Martin has developed a strong passion for money management and business model analysis. Martin holds a bachelor's degree in business administration.

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