Apply the 50/30/20 rule: 50% Needs, 30% Wants, 20% Savings. Then compare to your actual spending.
Your savings rate
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Your breakdown
Updates live as you type| Bucket | Target (50/30/20) | Your plan |
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Worked example
The tool uses the popular 50/30/20 rule, which splits after-tax income into 50% needs, 30% wants, and 20% savings. Take a take-home income of $6,500 a month. The targets are $3,250 for needs, $1,950 for wants, and $1,300 for savings. Now suppose your actual spending is $3,500 on needs, $1,800 on wants, and $1,200 to savings. Needs are about 53.8% of income, a little above the 50% guideline, often a sign that rent or a car payment is stretching the budget. Wants sit at 27.7%, comfortably under the 30% ceiling. Savings are $1,200, which is a savings rate of 18.5%, just shy of the 20% target. The fix is visible in the numbers: trimming roughly $100 from wants and $200 from needs would lift savings to the full $1,300 and put all three buckets on target.
How it is calculated
The calculator multiplies your monthly take-home income by 0.5, 0.3, and 0.2 to set the three targets, then compares each against the amount you actually allocate. Your savings rate is simply your savings divided by your income, expressed as a percentage, and the verdict text keys off that figure: 20% or more is excellent, 10% to 20% is on track, and below 10% flags a need to cut spending. The progress bars show each bucket relative to its own target, so a bar that fills past 100% means you are spending more than the rule suggests for that category. The 50/30/20 split is a starting framework rather than a law. High-cost-of-living areas often push needs above 50%, and aggressive savers deliberately run wants below 30% to lift their rate. Use the targets as a reference point and adjust the percentages to fit your own goals and stage of life.