How to calculate a 50/30/20 budget
The 50/30/20 rule splits your take-home pay: 50% to needs, 30% to wants and 20% to savings and debt repayment. It works from net pay, not gross, which is why an accurate take-home figure matters.
The rule
Needs = net pay × 0.50 · Wants = net pay × 0.30 · Savings and debt = net pay × 0.20
Do it automatically — 50/30/20 budget plannerStep by step
- 1Start with monthly take-home pay after tax and pension.
- 2Multiply by 0.5, 0.3 and 0.2 to get your three envelopes.
- 3List actual spending against each and find the gap.
- 4Adjust the ratios if housing costs in your city make 50% unrealistic.
What trips people up
- • Subscriptions and annual bills quietly belong in needs, not wants.
- • In high-cost cities a 60/20/20 split is often more honest than forcing 50%.
Common questions
Do pension contributions count in the 20%?
Yes — they are savings, and many people are already close to target because of them.
What if I have debt?
Minimum payments sit in needs; anything extra goes in the 20% savings bucket.
Skip the maths
Split your take-home into needs, wants and savings with the classic 50/30/20 rule.
Open the needs / wants / savings tool