Budget Calculator
Most budgets fail because the categories are guessed rather than counted. Enter your income and actual outgoings to see what is really left at the end of the month.
Formula
50 / 30 / 20 — needs / wants / saving, as shares of take-home pay
- Needs: rent, bills, food, travel
- Wants: everything discretionary
- Saving: including debt repayment above the minimum
On £2,400 a month: £1,200 needs, £720 wants, £480 saving
The 50/30/20 Starting Point
A widely used framework splits take-home pay three ways:
- 50% needs — rent or mortgage, bills, food, transport, minimum debt payments
- 30% wants — eating out, subscriptions, hobbies, holidays
- 20% savings and debt repayment — beyond the minimums
It is a benchmark, not a rule. In high-rent areas needs alone often exceed 50%, which tells you something useful in itself.
Budget From Take-Home, Not Salary
Always start from what actually lands in your account. Income tax, National Insurance, pension and student loan repayments come off first, and for UK basic-rate earners take-home is commonly around 70–75% of gross.
The Costs That Break Budgets
Monthly budgets tend to fail on irregular spending rather than the regular kind: car insurance, MOT and servicing, Christmas, birthdays, dentistry, replacing a boiler.
The fix is to total those annual costs and divide by twelve, then treat that figure as a monthly bill paid into a separate pot. A budget with no line for the unexpected is a budget that only works in quiet months.
Quick Reference
| Take-home | Needs (50%) | Wants (30%) | Saving (20%) |
|---|---|---|---|
| £1,500 | £750 | £450 | £300 |
| £2,000 | £1,000 | £600 | £400 |
| £2,500 | £1,250 | £750 | £500 |
| £3,000 | £1,500 | £900 | £600 |
| £4,000 | £2,000 | £1,200 | £800 |
Frequently Asked Questions
- What is the 50/30/20 rule?
- A guideline splitting take-home pay into 50 per cent needs, 30 per cent wants and 20 per cent savings or extra debt repayment. Treat it as a benchmark rather than a target.
- Should I budget from gross or net income?
- Net, always. Gross salary includes money that never reaches you, so budgeting from it overstates what you have by a quarter or more.
- How much should I keep as an emergency fund?
- Three to six months of essential outgoings is the usual advice, held somewhere instantly accessible rather than invested.
- Why does my budget never work?
- Usually irregular costs. Annual bills, car maintenance and Christmas are real monthly costs disguised as surprises. Total them and divide by twelve.