Budget Calculator
Plan your monthly budget by comparing income to expenses. See exactly where your money goes and find opportunities to save.
Budget Formula
Why Budget?
A budget is your financial roadmap—it tells your money where to go instead of wondering where it went. Without a budget, even high earners can struggle financially, while disciplined budgeters build wealth on modest incomes.
Our budget calculator helps you see the complete picture: how much comes in, where it goes, and how much you can save. This awareness is the first step to financial control.
See the Full Picture
Visualize income vs expenses at a glance.
Find Money Leaks
Identify where spending can be reduced.
Build Savings
Ensure you're saving for goals.
Reduce Stress
Know you can cover your bills.
The 50/30/20 Rule
A popular budgeting framework divides after-tax income into three categories. While not perfect for everyone, it's a solid starting point.
50% - Needs
Essential expenses: housing, utilities, groceries, transportation, insurance, minimum debt payments. If needs exceed 50%, look for ways to reduce housing or transportation costs.
30% - Wants
Non-essential spending: dining out, entertainment, hobbies, subscriptions, shopping. This is where most budget cuts happen when needed.
20% - Savings & Debt
Savings goals, investments, and extra debt payments beyond minimums. Prioritize emergency fund, then high-interest debt, then retirement.
Adjust as Needed
High cost-of-living areas may require 60% for needs. New graduates with loans might need 25% for debt. The key is intentionality, not rigid percentages.
Recommended Budget Percentages
These guidelines show typical spending as a percentage of income. Compare your numbers to spot areas that may be out of balance.
| Category | Recommended % | Max % | Notes |
|---|---|---|---|
| Housing | 25-30% | 35% | Rent/mortgage + insurance + taxes |
| Transportation | 10-15% | 20% | Car, gas, insurance, maintenance |
| Food | 10-15% | 15% | Groceries + dining out |
| Utilities | 5-10% | 10% | Electric, gas, water, phone, internet |
| Healthcare | 5-10% | 10% | Insurance + out-of-pocket |
| Savings | 10-20% | - | More is better |
| Debt Payments | 5-15% | 20% | Excluding mortgage |
| Entertainment | 5-10% | 10% | Subscriptions, hobbies, fun |
Common Budgeting Mistakes
Avoid these pitfalls that derail even well-intentioned budgeters.
Forgetting Irregular Expenses
Annual insurance, car registration, holiday gifts, home repairs. Divide annual costs by 12 and save monthly. Missing these destroys budgets.
Being Too Restrictive
Budgets with zero fun money fail. You'll 'cheat' and give up. Include reasonable entertainment spending to stay consistent.
Not Tracking Spending
A budget is useless if you don't compare it to actual spending. Review weekly. Small daily expenses add up faster than you think.
Ignoring Income Variability
If income varies (freelance, commission), budget based on your lowest-earning months. Put extra income directly to savings.
Budget Methods
Different budgeting approaches work for different personalities. Find one that fits your style.
Zero-Based Budget
Every dollar has a job. Income minus expenses equals zero (with 'expenses' including savings). Detailed and effective but time-consuming.
Envelope System
Cash in physical or digital 'envelopes' for each category. When an envelope is empty, spending stops. Great for overspenders.
Pay Yourself First
Automatically save a set percentage when paid, then spend the rest however you want. Simple but requires discipline on the spending side.
50/30/20
Broad categories (needs/wants/savings) without detailed tracking. Good for those who find detailed budgets overwhelming.
Cutting Expenses
When expenses exceed income, start with these high-impact areas where cuts are most effective.
Housing
Biggest expense, biggest savings potential. Consider roommates, downsizing, or relocating. Refinancing can save hundreds monthly on mortgages.
Transportation
Car payments, insurance, gas add up fast. One-car households save $500+/month. Public transit or biking saves even more.
Food
Dining out costs 3-5x home cooking. Meal planning and grocery lists prevent impulse buys. Pack lunches for work.
Subscriptions
Audit all subscriptions—many go unused. Streaming, gyms, apps, boxes. Cancel what you don't actively use.
Negotiate Bills
Call insurance, internet, and phone providers annually. Threatening to cancel often unlocks retention discounts.
Utilities
Smart thermostats, LED bulbs, and efficient appliances reduce bills. Simple habits like shorter showers help too.
Frequently Asked Questions
Should I budget with gross or net income?
Use net (after-tax) income—that's what actually hits your bank account. If you have pre-tax deductions (401k, health insurance), you can include those as 'expenses' if you use gross income, but net is simpler and more intuitive.
How do I handle variable income?
Budget based on your lowest typical month. In higher-earning months, immediately move excess to savings. Some people use a 'holding' account—deposit all income there, then 'pay yourself' a consistent monthly salary.
What if I can't balance my budget?
If expenses exceed income, you must either increase income or decrease expenses—there's no other option. Start by cutting discretionary spending (dining out, subscriptions). If that's not enough, look at bigger changes: housing, transportation, or finding additional income.
How much should I have in emergency savings?
Standard advice is 3-6 months of essential expenses. If you have unstable income or a single-income household, aim for 6-12 months. Start with a $1,000 mini-emergency fund, then build from there.
Should I pay off debt or save first?
Both. Save a small emergency fund ($1,000) first, then attack high-interest debt (over 7%). Once high-interest debt is gone, build full emergency fund while investing for retirement. Low-interest debt (under 5%) can wait.
How often should I update my budget?
Review spending weekly, adjust the budget monthly. Major life changes (new job, move, baby) require immediate budget overhauls. Annual reviews help adjust for lifestyle inflation and changing priorities.
Pro Tips
- Bookmark this calculator for quick access in the future
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- Try different scenarios to compare outcomes
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