Budget Planner (50/30/20)

How to use the budget planner

1. Enter your Take-home income (after tax) and how often you are Paid: Every week, Every two weeks, Twice a month, Every month or Per year. The tool converts it to a monthly amount.
2. Choose a Budget rule: 50/30/20 (needs/wants/savings), 60/20/20, 70/20/10, 80/20 (spend/save), or a Custom split with your own Needs (%), Wants (%) and Savings and debt repayment (%), which must add up to 100.
3. Under Monthly expenses, list your expenses with a Category (Needs, Wants or Savings and debt) and a Monthly amount. Use Add an expense for more rows and × to remove one. Examples are filled in to get you started.
4. Choose the Currency.

The results show your Monthly income, the Total planned and what is Left to assign. The table Targets vs your budget (per month) gives, for each category, the Target, what you Planned, its % of income and what Remaining (or how much you are over). The chart puts the target and planned amounts side by side. Download CSV exports your expenses with monthly and annual amounts and the targets, and Remember my budget on this device keeps everything in your browser for next time.

The 50/30/20 rule

Popularized by Elizabeth Warren and Amelia Warren Tyagi in All Your Worth, the rule splits take-home pay into three parts:

• 50% for needs: housing, groceries, utilities, transportation, insurance, minimum debt payments, child care.
• 30% for wants: restaurants, entertainment, travel, subscriptions, shopping.
• 20% for savings and debt: emergency fund, TFSA, RRSP, FHSA, and payments above the minimum on your debts.

The targets are simply income × percentage. Example with the default values: $5,000 a month gives targets of $2,500 for needs, $1,500 for wants and $1,000 for savings. The example expenses plan $2,700 of needs (over by $200), $480 of wants and $700 of savings, leaving $1,120 to assign: a good candidate for extra savings.

Choosing your split

In expensive cities, housing alone can take 40% of net income, so 60/20/20 or 70/20/10 can be more realistic; the important thing is to keep a savings share. If you are paying off expensive debt, raise the third part. The Custom split accepts any combination that adds up to 100%.

Tips

• Budget from your net pay, not your gross salary.
• Convert irregular expenses to a monthly amount: car insurance of $1,200 a year is $100 a month.
• Pay yourself first: set up automatic transfers to savings on payday.
• Review the budget after a raise, a move or a new loan.

This tool is a planning aid, not financial advice.