Enter your monthly or yearly income and expenses below, then click Calculate to see your budget breakdown, savings rate, and debt-to-income ratio. All income values are before tax.
A budget is an estimate and plan of income and expenditure, and commonly refers to a methodical plan to spend money a certain way. Budgets are created to reach certain financial goals — such as paying off credit cards, reaching a savings target, or getting income and expenses back on track.
While some people may prefer our budget calculator or a simple spreadsheet, others may prefer dedicated budgeting apps or software. They all have pros and cons, but the one that works best is the one that the budgeter will actually stick with.
Budgeting can generally be summed up by two things: living within your means and planning for the future.
Countless financial advisors over time have echoed the principle of living within your means. As simple as it may seem, many struggle to implement it successfully. Common reasons include:
Entire departments exist within many corporations for the sole purpose of budgeting and forecasting. This concept applies to individuals as well — it can be hard to achieve personal financial goals successfully without first planning for them. Proper planning can help with:
Most budgeters' main source of income comes from their full-time or part-time job in the form of salaries or wages. The second largest source of income tends to come from investments and capital gains, and there are various other methods of receiving additional income.
A higher income allows for more flexibility when it comes to expenses. It is generally accomplished through several main avenues: looking for a new job, attaining higher education, developing new skills, or networking with the right people. In some situations, a second job may be necessary to make ends meet.
Most budgeters will normally have rent or mortgage costs as the bulk of their monthly housing expenses. A general rule of thumb says housing costs should be no more than 30% of monthly gross income. Ways to reduce housing costs include refinancing to a lower rate, relocating to a more budget-friendly location, downsizing, or renting out a spare room. Smaller savings come from energy-efficient technologies such as programmable thermostats, LED lighting, and solar panels.
For most budgeters, the bulk of transportation expenses is their car payment or auto loan. As a general rule of thumb, monthly car payments should amount to less than 10% of gross income, and total transportation costs should stay below 15% of income. Ways to save include using public transport, carpooling, biking, walking, owning a more fuel-efficient vehicle, and keeping up with routine maintenance like properly inflated tires and regular oil changes.
Credit cards carry negative connotations regarding budgeting because people tend to use them to spend more than they can afford. When used under strict control, credit cards can be incorporated into a budget as a way to save on purchases and build good credit. However, particularly for those with constrained budgets, it is important to use credit cards sparingly to avoid large interest payments.
It is important not to double-dip when accounting for student loans, personal loans, or credit card debt in the budget. For example, do not add the same dinner to both "Credit Card" and "Meals Out".
While the expenses associated with daily living may seem insignificant next to housing, they can quietly add up. "Meals Out" is a category with lots of wiggle room — cooking at home is generally significantly more cost-efficient than eating out. Combined food and meals-out expenses should generally be less than 15% of income.
In the US, healthcare costs about $10,000 a year on average per person, and this is an expense with little pliability. Strategies that can help reduce costs include: don't smoke, eat healthier, get plenty of sleep, exercise regularly, use in-network providers, re-assess insurance needs annually, use tax-advantaged accounts such as an HSA, and buy generic drugs when possible.
It is often stated that an investment in education is the best investment a person can make, and statistics show a high correlation between higher education and higher income. In most developed countries, student aid from the government tends to be very accessible so that no matter a person's financial standing, they have the ability to attain higher education. Budgeters struggling to repay multiple high-interest student loans may consider consolidating them.
In healthy budgets, excess money is allocated for the future, including savings or investments for retirement, emergency funds, or college savings. As a general rule of thumb, it is recommended for the total of this section to be 15% or higher. An emergency fund in particular can make or break whether a person ends up in debt.
This section is generally the most pliable in a personal budget relative to categories such as housing or savings. It includes expenses that fall within the blurred lines of "needs" and "wants." Over-expenditure here can wreck a budget, but moderation can ease stress and even heal a budget. For anyone looking to fix a faltering budget, this section should be the first area to evaluate.
The 50/30/20 rule is a simple budgeting guideline that suggests allocating 50% of after-tax income to needs, 30% to wants, and 20% to savings and debt repayment. It is a helpful starting point, though it may not fit every situation.
DTI is the percentage of your gross monthly income that goes toward paying debts. Lenders often use it to assess how well you manage monthly payments. A DTI below 36% is generally considered healthy; above 43% may make it difficult to get new credit.
Most financial experts recommend saving 3 to 6 months of living expenses in an easily accessible account. If your income is variable or you work in a volatile industry, consider saving more.
A budget is an overall estimate of income and expenses, while a spending plan is a more detailed, forward-looking allocation of where each dollar will go. In practice, the two terms are often used interchangeably.
This Budget Calculator is provided for educational and informational purposes only. The results are estimates based on the values you enter. Actual financial outcomes will vary based on taxes, inflation, market conditions, and your personal circumstances. Always consult a licensed financial advisor before making major financial decisions.