Budget Calculator

A budget is a plan of income and expenses. This calculator summarizes monthly income and expenses to show the remaining amount available for savings or spending. It also checks the expenses against metrics that financial planners consider. As you enter values in each field, the results panel updates in real time to match the entered values.

Here's how to use the budget calculator:

Start with income. Enter your gross salary and other gross-based income and set a tax rate so the tool can calculate your net income. If you already have a budget based on your net income, just enter your net income directly and leave the tax rate at zero.

Next, enter your individual spending categories one by one. For each monthly expense, input the corresponding amount in its respective category and leave entries that do not apply blank (zero). As you go along, your net income, total expenses, and available balance will be displayed at a glance. Positive numbers indicate remaining funds while negative numbers mean your expenses exceed your income.

Gross income:

Many budget guidelines are based on gross income, so this calculator asks for gross income and tax rates. Since only the net income actually hits your account, savings rates are calculated using net income. In contrast, housing and debt guidelines use gross income.

Expense categories

Nine categories allow for a detailed budget without being overwhelming. Housing includes rent or mortgage, property taxes, insurance and homeowners association dues. Utilities include electric, water, phone and internet bills. Transportation includes car loans, gas, insurance and public transportation fares. The remaining categories break down daily expenses into food, healthcare, debt repayment, personal care, leisure and savings.

There's one important thing to keep in mind when you're making a budget: avoid double counting. If you pay for a meal at a restaurant with your credit card, record it under the "fun" category and not the "debt" category. The same goes for tuition that is paid off through student loans.

Budget shares and guidelines

The results section converts the values entered into percentages used by financial institutions and advisors. The housing expense ratio is the ratio of housing expenses to total income. The debt-to-income ratio is the sum of debt service and housing expenses, divided by total income. The savings rate is the amount saved, divided by net income. General target values are given in the table.

50/30/20 rule

If you find nine categories to be too many, the 50/30/20 rule offers a simpler framework. Allocate 50% of your net income for necessities, 30% for wants and 20% for savings and extra debt repayment. If you enable the "50/30/20" plan in this calculator, you'll see three goals based on your own dollar amounts as well as a bar chart comparing your actual spending to those goals.

Needs are expenses that cannot be reduced. These include housing costs, utilities and communications, transportation to work, food, healthcare, and minimum debt payments. Wants are things that make life more pleasant but can be cut in an emergency. These include eating out, streaming services, hobbies, and travel. Savings is money set aside for future purposes and not spent immediately. The line between needs and wants varies from person to person, so consider this a guideline.

Budgeting as a way to progress

The core of a budget is not the spreadsheet itself but rather the decisions you make based on it. Instead of seeing how much money is left at the end of the month, treat savings as a fixed expense and prioritize "paying yourself first." Before pursuing other goals, build up an emergency fund that covers three to six months' worth of expenses; even one unexpected bill can lead many households into debt.

If your budget is tight, the categories for your lifestyle are usually the most flexible and should be reviewed first. Next, you can compare costs of fixed expenses such as insurance or cell phone contracts. If your budget has a buffer, decide immediately how you want to use that money, whether it's investments, additional debt repayment, or special savings plans for known future expenses.

Tips for sustainable budgeting

First record your expenses in detail for a full month before assessing the numbers. Irregular bills can't usually be captured within one week. Review your plan whenever your income or rent changes. It's better to round up expenses rather than cut them, as unexpected events may turn out to be pleasant surprises. Pick a tool - whether it's a calculator, app, or notebook - that you'll actually enjoy using regularly. Consistency trumps the complexity of the tool.

This calculator is for general educational and planning purposes only and does not constitute financial advice. The percentages listed are guidelines and not restrictions. Your personal budget will depend on your income, where you live, family situation and goals.