About This Calculator
This calculator applies the 60/20/20 budgeting rule to help you allocate your monthly income effectively. According to this method, you divide your after-tax income into three categories:
- 60% for Needs – essential living expenses like housing, groceries, and utilities
- 20% for Wants – non-essential spending like entertainment, dining out, or subscriptions
- 20% for Savings – financial goals such as emergency funds, retirement, or debt repayment
This budgeting rule offers a simple, balanced framework for managing personal finances and building long-term financial stability.
How to Use
- Enter your monthly income after tax in the input field.
- Click the "Calculate" button to see the recommended allocation for Needs, Wants, and Savings.
- The output will be displayed using the same currency unit as your input.
Frequently Asked Questions
What is the 60/20/20 rule?
It's a simple budgeting strategy that divides your income into 60% for needs, 20% for wants, and 20% for savings or investments. It helps ensure your basic expenses are covered while still prioritizing financial growth and lifestyle flexibility.
Can I customize the percentages?
No. This calculator uses the fixed 60/20/20 ratio. For customizable budgeting, you might consider alternatives like the 50/30/20 rule.
What qualifies as a "Need"?
Needs include essentials such as rent or mortgage payments, groceries, utility bills, insurance, and transportation costs—anything necessary for day-to-day survival.
Should I use gross or net income?
It’s recommended to use net (after-tax) income so that your budget reflects actual money available for spending and saving.
Is this rule suitable for all income levels?
While the 60/20/20 rule is a helpful guideline, it may not suit everyone. Individuals with higher living costs or debt may need to adjust the ratios to match their financial reality.