Budget Calculator
Plan your personal budget using the popular 50/30/20 rule. Enter your income and expenses across Needs, Wants, and Savings categories to see how your spending compares to recommended targets. Includes Canadian-specific categories like RRSP and TFSA.
Monthly Income
Your net pay after taxes, CPP, and EI deductions
Side income, rental income, child benefits, etc.
Needs (Target: 50%)
Wants (Target: 30%)
Savings & Debt (Target: 20%)
Monthly Budget Summary
$4,500
total monthly income
Monthly Surplus
$350
Your budget is balanced. Great job!
Monthly Savings Rate
13.3%
50/30/20 Rule Comparison
Actual % vs recommended target
The 50/30/20 Budget Rule
The 50/30/20 rule is a simple budgeting framework popularized by Senator Elizabeth Warren. It divides your after-tax income into three categories:
- 50% Needs: Essential expenses you cannot avoid -- housing, groceries, utilities, insurance, transportation, minimum debt payments, and phone/internet.
- 30% Wants: Non-essential spending that improves your quality of life -- dining out, entertainment, shopping, subscriptions, and personal care.
- 20% Savings & Debt Repayment: Money allocated to building your financial future -- RRSP, TFSA, emergency fund, and extra debt payments beyond minimums.
Canadian-Specific Budgeting Tips
- RRSP Contributions: Contributions are tax-deductible and grow tax-free until withdrawal. The 2024 limit is $31,560 or 18% of previous year's income. Consider maximizing contributions if you're in a higher tax bracket.
- TFSA Contributions: Grow and withdraw tax-free. The 2024 annual limit is $7,000. Ideal for short-to-medium term savings goals.
- CPP and EI: These are automatically deducted from your paycheque before you receive your net pay, so they're already accounted for in your take-home amount.
- GST/HST Credit: If you qualify, this quarterly payment can supplement your income. Include it in "Other Income" if applicable.
- Canada Child Benefit: Tax-free monthly payments for families with children under 18. Include in "Other Income."
Common Budgeting Mistakes
- Forgetting irregular expenses: Annual subscriptions, car maintenance, gifts, and property taxes should be divided by 12 and included monthly.
- Not tracking small purchases: Daily coffee, vending machines, and impulse buys add up quickly.
- No emergency fund: Aim for 3-6 months of needs expenses before aggressively investing or paying down low-interest debt.
- Being too restrictive: A budget that eliminates all wants is hard to maintain. The 30% wants allocation keeps you motivated.
- Not reviewing monthly: Your budget should be a living document. Review and adjust at least once a month.
Important Disclaimer
This calculator provides estimates for educational and planning purposes only. Results should not be considered as financial or tax advice. The 50/30/20 rule is a guideline -- your ideal budget allocation may differ based on your income level, location, and financial goals.
Consult a qualified financial advisor for personalized budgeting and financial planning advice.