50/30/20 Budget Calculator
Apply the 50/30/20 rule to your monthly net income. Enter your expenses to get your real-time financial health score.
Frequently Asked Questions
What is the 50/30/20 rule?▾
The 50/30/20 rule is a simple budgeting method popularized by Elizabeth Warren in her book "All Your Worth." It suggests allocating 50% of your net income to essential needs (housing, food, transportation), 30% to wants (entertainment, dining out, subscriptions), and 20% to savings and debt repayment.
What counts as a "need" in the 50/30/20 rule?▾
Needs are essential expenses you cannot do without: rent or mortgage, basic groceries, utilities (electricity, water, heating), car and health insurance, transportation to work, minimum debt payments. Wants are everything else — restaurants, streaming services, non-essential clothing, vacations.
My rent alone exceeds 50% of my income. What should I do?▾
In expensive real estate markets like Montreal or Toronto, housing can exceed 30-35% of income for many people. In this case, adapt the rule to your situation: cut wants first, then look to increase your income or reduce housing costs over the medium term. The 50/30/20 rule is a guideline, not an absolute rule.
Does the 20% savings include debt repayment?▾
Yes. The 20% is for both savings AND debt repayment beyond minimums. This includes RRSP and TFSA contributions, an emergency fund (target: 3 to 6 months of expenses), and accelerated repayment of student loans, credit cards, or mortgage.
How can I improve my financial health score?▾
Three high-impact actions: (1) Automate your savings by automatically transferring 20% of each paycheck to a TFSA or RRSP. (2) Reduce subscriptions and "wants" spending by auditing your bank statements. (3) If your needs exceed 50%, consider reducing rent (moving, roommates) or increasing your income.