Fifty Thirty Twenty Rule (50/30/20 Rule) Calculator

Calculates the 50/30/20 rule for a given income, providing a breakdown of necessities, wants, and savings amounts.

Necessaries Formula

$14600 * 0.5 = $7300.0.If Sarah earns $14600 and her necessities cost 50% of her income, then her necessities are $7300. The result number ($7300) represents 50% of Sarah's total income, meaning she needs to allocate half of her earnings towards essential expenses.

Wants Formula

$13100 * 0.3 = $3930.0.John's monthly income from his job is $13100, and he wants to save 30% of it. He needs to save $3930 per month for his savings goals.

Savings Formula

$16400 * 0.2 = $3280.0.Emily saves $3,280 from her annual income of $16,400. The amount saved represents 20% of Emily's total income.

Meaning

The 50/30/20 rule is a budgeting guideline that divides your after-tax income into three parts: 50% for essentials (needs), 30% for discretionary spending (wants), and 20% for savings and debt repayment. This approach helps you manage your finances by ensuring that you cover necessary expenses, enjoy life’s extras, and build a financial safety net.