50 30 20 Calculator

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50/30/20 Budget Calculator

Enter your total take-home pay per month.

Your Budget Breakdown

Needs (50%)

$0.00

Housing, groceries, utilities, transport, insurance.

Wants (30%)

$0.00

Dining out, hobbies, subscriptions, shopping.

Savings (20%)

$0.00

Emergency fund, debt payoff, retirement.

function calculateBudget() { var income = parseFloat(document.getElementById('monthlyIncome').value); var resultDiv = document.getElementById('budgetResult'); if (isNaN(income) || income <= 0) { alert("Please enter a valid monthly income amount."); resultDiv.style.display = 'none'; return; } var needs = (income * 0.50).toFixed(2); var wants = (income * 0.30).toFixed(2); var savings = (income * 0.20).toFixed(2); document.getElementById('needsVal').innerText = '$' + Number(needs).toLocaleString(); document.getElementById('wantsVal').innerText = '$' + Number(wants).toLocaleString(); document.getElementById('savingsVal').innerText = '$' + Number(savings).toLocaleString(); resultDiv.style.display = 'block'; resultDiv.scrollIntoView({ behavior: 'smooth' }); }

Understanding the 50/30/20 Rule

The 50/30/20 rule is a straightforward budgeting framework popularized by Senator Elizabeth Warren in her book, All Your Worth: The Ultimate Lifetime Money Plan. It is designed to help individuals manage their after-tax income effectively without complex spreadsheets.

How the Rule Works

This method splits your net monthly income into three distinct categories:

  • 50% for Needs: These are your essential expenses that you must pay to survive and function. This includes rent or mortgage payments, basic groceries, electricity, water, health insurance, and car payments.
  • 30% for Wants: These are lifestyle choices. They are things you enjoy but could live without if necessary. Examples include Netflix subscriptions, eating at restaurants, tickets to a concert, or buying a new gadget.
  • 20% for Savings and Debt: This portion goes toward your financial future. It includes contributions to an emergency fund, 4001(k) or IRA deposits, and paying down high-interest debt like credit card balances.

A Realistic Example

Let's say your take-home pay after taxes is $5,000 per month. Using the 50/30/20 calculator, your budget would look like this:

Category Percentage Monthly Amount
Needs 50% $2,500
Wants 30% $1,500
Savings & Debt 20% $1,000

Why Use This Calculator?

The primary benefit of the 50/30/20 rule is balance. It ensures you are covering your current responsibilities (Needs), preparing for the future (Savings), and still enjoying your life today (Wants). If your "Needs" exceed 50%, it may be a signal to look for ways to reduce your fixed costs, such as downsizing housing or finding a cheaper insurance plan.

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