Split your take-home pay into needs, wants and savings using the 50/30/20 rule – and change the percentages if your rent is high.
By TanLabs · Formulas cross-checked against the free spreadsheet · Updated 2026-10-31 · Runs in your browser – nothing you type is sent anywhere
With monthly take-home pay $4,000, needs 50%, wants 30%, savings & debt 20%:
Needs $2,000 · Wants $1,200 · Savings $800
Percentages add up to 100%.
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Needs = income × 50%, wants = income × 30%, savings and extra debt payments = income × 20% (percentages editable).
Monthly amounts for common take-home pay levels:
| Take-home / month | Needs 50% | Wants 30% | Savings 20% | Saved per year |
|---|---|---|---|---|
| $2,500 | $1,250 | $750 | $500 | $6,000 |
| $3,500 | $1,750 | $1,050 | $700 | $8,400 |
| $4,000 | $2,000 | $1,200 | $800 | $9,600 |
| $5,000 | $2,500 | $1,500 | $1,000 | $12,000 |
| $6,500 | $3,250 | $1,950 | $1,300 | $15,600 |
| $8,000 | $4,000 | $2,400 | $1,600 | $19,200 |
At $4,000 take-home the rule leaves $2,000 for needs. If your rent alone is close to that, a 60/20/20 or 70/20/10 split is more realistic while you raise income or lower costs.
Yes. If rent alone is above 50%, try 60/20/20 for a while.
Minimums are needs; anything extra goes in the 20%.
Use take-home (after-tax) pay.
It was popularised by Elizabeth Warren and Amelia Warren Tyagi in the book "All Your Worth" (2005).
Often not at first. Treat it as a direction: keep savings at a fixed percentage and let needs and wants adjust.
In the 20% if you pay it yourself. If it is taken from your paycheck, your take-home already excludes it, so anything in the 20% is extra.