Budget Calculator — Plan Your Monthly Budget
Track your income against your spending across every category. See exactly where your money goes and how much you have left to save. Free, instant, with AI budgeting advice.
Love books? Audible is cheaper than buying — try it free for 30 days with over 500,000 titles.
How to Build a Monthly Budget
A budget is simply a plan for your money — comparing what comes in against what goes out, so you know exactly where you stand each month. The calculator above breaks your spending into common categories, showing you your remaining balance and savings rate instantly.
Savings rate: 17.1% of income
The 50/30/20 Budgeting Rule
One of the most widely used budgeting frameworks splits your after-tax income into three broad categories. It's a helpful starting point, though your own split may vary based on your circumstances and cost of living.
| Category | % of Income | Includes |
|---|---|---|
| Needs | 50% | Housing, groceries, utilities, transport, minimum debt payments |
| Wants | 30% | Entertainment, dining out, hobbies, subscriptions |
| Savings & Debt | 20% | Emergency fund, retirement savings, extra debt repayment |
Common Budgeting Methods
- 50/30/20 Rule. Simple percentage-based split between needs, wants and savings. Good for beginners who want a straightforward framework.
- Zero-based budgeting. Every unit of income is assigned a job — expenses, savings or debt repayment — until income minus allocations equals zero. More detailed but very precise.
- Envelope method. Cash (or digital equivalent) is allocated to specific spending categories in advance. Once an envelope is empty, spending in that category stops for the month.
- Pay yourself first. Savings and investments are set aside automatically before any other spending happens, treating savings like a non-negotiable bill.
What to Do If You're Over Budget
If the calculator shows you're spending more than you earn, that's genuinely useful information — it means action is needed before debt builds up. A few practical starting points:
- Review discretionary spending first. Entertainment, dining out and subscriptions are usually the easiest categories to trim without major lifestyle disruption.
- Check for forgotten subscriptions. Recurring charges for services you no longer use are extremely common and easy to miss.
- Negotiate fixed costs where possible. Insurance, phone contracts and internet plans can often be renegotiated or switched for a better rate.
- Address debt with the highest interest rate first. If debt repayment is squeezing your budget, prioritising high-interest debt reduces the total interest paid over time. Our Loan Calculator can help you see the full cost of any debt you're carrying.
Building an Emergency Fund Alongside Your Budget
Once your budget is under control, building an emergency fund should typically be the next priority before other savings goals. Having 3-6 months of essential expenses set aside protects you from needing high-interest borrowing when something unexpected happens. Use our Emergency Fund Calculator to work out your specific target based on your own expenses.
FAQs
How do I create a monthly budget?
List your after-tax income, then track every expense category — housing, groceries, transport, utilities, entertainment, debt and other. Subtract total expenses from income to see what’s left over. The calculator above does this instantly.
What is the 50/30/20 budgeting rule?
A guideline splitting after-tax income into 50% needs, 30% wants, and 20% savings and debt repayment. It’s a helpful starting framework, though your own split may differ based on your cost of living.
What percentage of income should go to housing?
A commonly cited guideline is 25-30% of gross income, though this varies significantly by location and personal circumstances. In high cost-of-living areas, housing often takes up considerably more.
What should I do if I'm spending more than I earn?
Review discretionary spending first (entertainment, dining out, subscriptions), check for forgotten recurring charges, and consider negotiating fixed costs like insurance or phone contracts.
What is zero-based budgeting?
A method where every unit of income is assigned a specific job — expenses, savings or debt — until income minus all allocations equals zero. It’s more detailed than percentage-based budgeting but offers precise control.
How much should I save each month?
A common guideline is 20% of income, following the 50/30/20 rule. Any consistent savings amount is better than waiting until you can save the “ideal” percentage.
Should I build an emergency fund or pay off debt first?
Generally, build a small starter emergency fund first (even $500-1000), then focus on high-interest debt, then build your full emergency fund. This balances protection from new debt with reducing existing interest costs.
Is this budget calculator free?
Yes — completely free, no sign-up required. Enter your income and expenses above for an instant breakdown.