How the 50/30/20 Budget Calculator Works
Our 50/30/20 calculator divides your take-home income, or the money that goes into your account after taxes, into suggested spending in three categories:
- 50% of net pay for needs (housing, utilities, groceries, insurance, etc.).
- 30% for wants (entertainment, dining out, vacations, hobbies, etc.).
- 20% for savings and debt repayment (emergency fund, investments, loan payments, etc.).
For example, if you make $3,000 each month after taxes:
- $1,500 should go toward necessities.
- $900 for wants.
- $600 for savings and debt paydown.
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