50/30/20 Budget Calculator

The 50/30/20 rule is a simple budgeting framework where you allocate your after-tax income as follows: 50% to needs (essential expenses like rent, utilities, food), 30% to wants (non-essential spending like entertainment, dining out), and 20% to savings and debt repayment.

Always use your net (take-home) pay - the amount that actually hits your bank account after tax, NI, pension contributions, and any other deductions. This is the money you have available to spend and save.

Needs are essential expenses you cannot avoid: rent/mortgage, utilities, basic groceries, transport to work, insurance, and minimum debt payments. Wants are things that improve your quality of life but aren't strictly necessary: entertainment, dining out, gym membership, streaming services, and non-essential shopping.

Start with what you can manage, even if it's 5% or 10%. The key is building the habit. Look for ways to reduce needs (cheaper housing, lower bills) or wants (fewer subscriptions, eating out less). As your income grows or expenses decrease, work toward the 20% target.

It's a good starting point, but not one-size-fits-all. High-cost areas like London may require 60% on needs. Those with high debts might need 30%+ for repayment. Adjust the percentages to fit your circumstances while maintaining the principle of balanced spending.

Prioritize: 1) Emergency fund (3-6 months expenses in an easy-access account), 2) Pension contributions (especially if your employer matches), 3) Pay off high-interest debt, 4) ISAs and investments for long-term goals. The right split depends on your situation and goals.