How to use the Budget Calculator
- Enter monthly take-home pay after tax and deductions.
- Enter housing: rent or mortgage plus utilities and insurance.
- Fill in transport, food, debt payments and everything else.
- Check the savings rate and housing share against the benchmarks below.
How the calculation works
Two benchmarks do most of the work. Housing under 30% of take-home keeps the rest of a budget workable, and a savings rate of 15% or more puts most households on track for a conventional retirement. When housing exceeds 40%, no amount of discipline elsewhere reliably fixes the budget — the housing cost has to change.
The 50/30/20 framework maps onto these inputs directly: roughly 50% to needs (housing, transport, food), 30% to wants (most of the 'everything else' line), and 20% to saving and extra debt repayment. Treat it as a diagnostic ratio, not a rule.
Because it is built on take-home rather than gross pay, the leftover figure is genuinely spendable — no hidden tax to come. Add a monthly average for annual costs like insurance premiums and car maintenance to the 'everything else' line, or the budget will look healthier than it is.
Left = take-home − Σ categories; Savings rate = left ÷ take-homeSource: U.S. Bureau of Labor Statistics Consumer Expenditure Survey category shares; Warren & Tyagi, All Your Worth (50/30/20).
Worked example
$5,200 take-home with $1,600 housing, $500 transport, $650 food, $400 debt, $700 other.
- Total spending is $3,850.
- Remaining is $1,350.
- Housing is 30.8% of take-home.
A 26% savings rate with housing just above the 30% guideline — a healthy position.
Frequently asked questions
Should I budget on gross or net income?+
Net. Gross-based budgets consistently overstate what is available to spend.
How do I handle irregular income?+
Budget on your lowest recent three-month average and treat anything above it as savings.
Where do sinking funds go?+
Add a monthly twelfth of each annual expense to the 'everything else' line so the year's bills are pre-funded.
Last reviewed September 1, 2026. We review this page whenever the underlying formula, tax year, published rate or standard changes.