50/30/20 budget calculator
Split your take-home pay into needs, wants and savings — and see honestly whether the rule survives contact with your actual rent.
Split your pay
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| Needs (50%) | — |
|---|---|
| Wants (30%) | — |
| Savings (20%) | — |
| Your actual needs | — |
| Left for wants and savings | — |
| Verdict | — |
What the rule says
Half your take-home pay to needs, three tenths to wants, one fifth to savings and debt repayment. It comes from Elizabeth Warren and Amelia Warren Tyagi's All Your Worth (2005), and its virtue is that it is simple enough to actually use.
Needs are what continues if your income stops: rent or mortgage, council tax, utilities, food, transport to work, insurance, minimum debt payments. Wants are everything you would cancel: eating out, subscriptions, holidays, the nicer supermarket. Savings includes overpaying debt above the minimum, because clearing a 21% credit card is a better return than any savings account offers.
Where it breaks in the UK
For a great many people, housing alone takes more than 50%. The rule was written in the United States two decades ago, and UK rents relative to wages have moved a long way since. If your essentials come to 65% of take-home pay, the honest response is not to conclude you are bad with money — it is to notice that the ratio is set by the housing market, not by your choices.
The tool above says so rather than shaming you into an impossible target, and splits what is genuinely left in the same proportion. A consistent £80 a month is worth far more than an abandoned plan to save £440.
What to do when it does not fit
In order of how much they actually move: housing cost is by far the largest lever and the hardest to pull; income is next and is worth more attention than most budgeting advice gives it; then recurring subscriptions, which are small individually and add up; then day-to-day spending, which is where most advice concentrates and where the least money is.
If there is high-interest debt, the 20% should go there before it goes to savings — beyond holding a small buffer of a few hundred pounds so that an unexpected bill does not put you straight back on the card.
Common questions
What is the 50/30/20 rule?
Allocate 50% of take-home pay to needs, 30% to wants and 20% to savings and debt repayment. It comes from the book All Your Worth by Elizabeth Warren and Amelia Warren Tyagi.
Is 50/30/20 realistic in the UK?
Often not, because housing frequently takes more than 50% of take-home pay on its own. That reflects the housing market rather than personal failure. Splitting whatever remains in the same proportion is more useful than abandoning the plan.
Does the 20% include pension contributions?
Usually not, because a workplace pension comes out before you see your pay. The 20% refers to what you choose to save from take-home pay. If you count the pension, you will overstate your discretionary saving.
Should I pay off debt or save first?
Clear high-interest debt first, once you hold a small buffer of a few hundred pounds. Paying off a 21% credit card is a guaranteed 21% return, which no savings account matches.
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