50/30/20 Budget Calculator

The 50/30/20 rule splits your after-tax income into three categories: 50% for needs (rent, groceries, insurance), 30% for wants (dining out, entertainment, hobbies), and 20% for savings and debt repayment. Developed by US Senator Elizabeth Warren, it provides a simple framework that works for most income levels. Our calculator applies this rule automatically to your net income and shows you exactly how much to allocate to each category.

Your net income is your gross salary minus taxes, social security contributions, and health insurance. In Germany, this typically means your gross salary minus about 35-45% for taxes and contributions. Check your latest payslip for the "Nettobetrag" — that's the figure you should enter into the calculator. If you have multiple income sources, add all net amounts together.

Needs are expenses you cannot avoid: rent or mortgage, groceries, utilities, health insurance, minimum debt payments, and transportation to work. Wants are everything you enjoy but could technically live without: streaming subscriptions, restaurant meals, gym memberships, and new clothing beyond basics. The grey area includes items like a smartphone (need) vs. the latest model (want), or basic internet (need) vs. premium speed (want). When in doubt, ask yourself: would I face serious consequences if I cut this expense?

Absolutely. The 50/30/20 split is a starting point, not a rigid rule. If you live in an expensive city like Munich or Hamburg, you might need a 60/20/20 split. High earners often use 40/20/40 to accelerate savings. Another popular alternative is zero-based budgeting, where every euro gets assigned a specific job. Our calculator lets you customize the percentages to fit your actual situation — the best budget is one you can stick to.

In many German cities, rent alone can consume 30-40% of net income, pushing needs well above 50%. If that happens, focus on two things: reducing where possible (switch energy providers, review insurance contracts, consider flat-sharing) and adjusting the rule temporarily to something like 60/25/15. The key insight is that the 20% savings category should be the last one you cut — even 50 EUR per month compounds significantly over time. Use our Savings Calculator to see how small amounts grow.

For couples sharing expenses, you have two options: combine both incomes and apply the rule to the total, or keep finances separate and each apply the rule individually. The combined approach works best when incomes are similar. If there's a significant income gap, consider using our Fair Share Calculator to split shared expenses proportionally first, then apply the 50/30/20 rule to each person's remaining income.

Beyond 50/30/20, several proven methods exist. The envelope method assigns cash to physical envelopes for each spending category — when the envelope is empty, you stop spending. Zero-based budgeting gives every euro a purpose, ensuring income minus expenses equals zero. The 80/20 method is even simpler: save 20%, spend 80% however you like. The pay-yourself-first approach automatically transfers savings on payday before you can spend it. Each method has strengths — the best one is whichever you'll actually follow consistently.

A budget only works if you track it regularly. Review your spending weekly for the first month, then monthly once habits form. Many people use spreadsheets, but a shared budgeting app makes tracking effortless — especially for households. GoodShare lets you and your partner log expenses in real-time, categorize them automatically, and see budget progress together. The app works offline and syncs across devices, so you always know where you stand.