Build your monthly budget using the 50/30/20 rule. Enter income and expenses to see your spending breakdown, savings rate, monthly surplus or deficit and yearly projection.
Enter your monthly net income and fill in each spending category. The calculator compares your budget to the 50/30/20 rule and shows surplus or deficit.
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The 50/30/20 rule allocates after-tax income as follows: 50% to needs (housing, utilities, food, transport, minimum debt payments), 30% to wants (dining out, entertainment, hobbies, subscriptions) and 20% to savings and debt repayment above minimums. Adjust the percentages based on your cost of living — in high-rent cities, housing alone may consume 40-50%.
The traditional guideline is to spend no more than 30% of gross monthly income on housing including utilities. In high-cost cities like London or New York, many households spend 40-50% on housing out of necessity. If housing exceeds 30%, look for ways to increase income or reduce other categories to still achieve a positive monthly savings rate.
For retirement at a traditional age, saving 15-20% of gross income is generally sufficient if started in your 20s or 30s. For early retirement, 40-70% savings rates are needed. Even saving 5-10% consistently from an early age, invested in low-cost index funds, builds substantial wealth over decades. Automating savings before discretionary spending is the most effective habit.
An emergency fund should cover 3-6 months of essential living expenses including housing, food, utilities and transport. Calculate your monthly essential costs using this calculator first. Build the fund before aggressively investing — it prevents you from taking on debt or liquidating investments when unexpected expenses arise. Keep emergency funds in an easy-access savings account.
Zero-based budgeting assigns every pound of income a purpose so that income minus all allocated spending equals zero. You allocate money to savings and investments first, then to expenses. Every budget period starts fresh — you justify each expense rather than rolling over previous budgets. It requires more effort but gives maximum control and reveals hidden spending patterns.
Start by tracking every expense for 30 days to identify patterns. Common quick wins: negotiate bills (insurance, phone, broadband), cancel unused subscriptions, meal plan to reduce food delivery costs, use cashback credit cards for existing spending, refinance high-interest debt, and switch to cheaper energy tariffs. Reducing fixed costs has the biggest long-term impact since it compounds every month.
A complete budget includes: housing, utilities, food (groceries and dining out separately), transport, debt payments, subscriptions, personal care, clothing, healthcare, entertainment, savings and investments, and an irregular expenses fund for car repairs, holidays and gifts. Budget at least 1-2% of home value annually for maintenance if you own your home.
UK households typically spend 60-100 pounds per person per month on groceries plus dining out. US USDA moderate-cost guidelines suggest approximately 280-380 dollars per adult per month. Cooking at home 5 or more days per week, meal planning and buying own-label products are the most effective ways to reduce food costs without significantly impacting quality of life.
