50/30/20 Budget Calculator
Plan your monthly budget using the popular 50/30/20 rule. Allocate 50% to needs, 30% to wants, and 20% to savings. Customize the ratios to fit your lifestyle and financial goals.
Your Income
Budget Ratio
Needs
Target: $0
Actual: $0
Wants
Target: $0
Actual: $0
Savings
Target: $0
Actual: $0
50/30/20 Budget Tips
- Needs (50%): Essential expenses you can't avoid - rent, utilities, groceries, transport, insurance.
- Wants (30%): Non-essential spending - dining out, entertainment, hobbies, subscriptions.
- Savings (20%): Pay yourself first - emergency fund, investments, debt repayment beyond minimums.
- Adjust the ratios based on your situation. High-cost cities may require 60/20/20.
What Is the 50/30/20 Budget Rule?
The 50/30/20 budget rule is a simple framework for managing your money. Popularised by Senator Elizabeth Warren in her book "All Your Worth," this approach divides your after-tax income into three categories:
50% - Needs
Essential expenses you must pay: rent/mortgage, utilities, groceries, transport, insurance, minimum debt payments, and healthcare.
30% - Wants
Non-essential spending that improves your life: dining out, entertainment, hobbies, subscriptions, shopping, and travel.
20% - Savings
Future financial security: emergency fund, retirement savings, investments, and extra debt repayments beyond minimums.
How to Use This Calculator
- Enter your monthly income - Choose whether it's before or after tax. If before tax, enter your estimated tax rate.
- Adjust the budget ratios - The default is 50/30/20, but you can customise based on your situation.
- Add your expenses - List your actual spending in each category (Needs, Wants, Savings).
- Review the results - See how your actual spending compares to your targets and identify areas to adjust.
When to Adjust the 50/30/20 Ratio
The 50/30/20 rule is a guideline, not a strict requirement. Consider adjusting based on your circumstances:
| Situation | Suggested Ratio | Reason |
|---|---|---|
| High-cost city (Sydney, Melbourne) | 60/20/20 | Housing takes a larger portion of income |
| Paying off high-interest debt | 50/20/30 | Prioritise debt repayment in savings category |
| Building emergency fund | 50/25/25 | Boost savings temporarily |
| High income, low expenses | 40/20/40 | Maximise wealth building |
| Student or entry-level salary | 70/20/10 | Higher needs when income is limited |
Example: Australian Median Income Budget
Based on the Australian median full-time income of approximately $78,000 per year ($5,200/month after tax):
| Category | Percentage | Monthly Amount | Example Expenses |
|---|---|---|---|
| Needs | 50% | $2,600 | Rent $1,600, Utilities $200, Groceries $400, Transport $200, Insurance $200 |
| Wants | 30% | $1,560 | Dining $300, Entertainment $200, Shopping $300, Subscriptions $100, Hobbies $200, Travel savings $460 |
| Savings | 20% | $1,040 | Emergency fund $300, Super top-up $200, Investments $400, Goals $140 |