50/30/20 rule calculator, how to split your paycheck
How much of your paycheck should go to essentials, extras and savings? Enter your income, your needs and your wants, and compare your split with the one the rule suggests.
Your split compared with the rule
This is a guideline, not a rule you must follow. Adjust the percentages to your situation. The idea is to set something aside each month, even if it is only a little.
Estimate for educational purposes. Not financial advice.
How it works
The calculator applies the percentages to your take-home income. For example, with $2,200 a month, the rule suggests $1,100 for needs, $660 for wants and $440 for savings and investing. Your savings are what is left after subtracting your needs and wants.
Where the rule comes from
It was popularized by Elizabeth Warren and her daughter Amelia Warren Tyagi in their book "All Your Worth", published in 2005. Their idea was that you do not need a budget with dozens of categories to organize your money, just three numbers to watch.
Good to know
- It is a starting point, not a law. If you live in an expensive city or have a low income, you may not reach these percentages, and that does not mean you are doing it wrong.
- If you have expensive debt or no emergency fund yet, that 20% usually goes there first and to investing afterwards.
- The same purchase can be a need or a want. Basic groceries are a need, and eating out is a want. Being honest when you split them is what makes the result useful.
Educational content. This is not financial advice.