Budgeting Calculator 2024

Budgeting Calculator: Learn how to gain control of your saving and spending

Budgeting Calculator

A Monthly Budgeting Calculator to Help Take Control of Your Finances

Are you struggling to keep your spending below your income? Do you strategize about how to increase your savings? Our free budgeting calculator will help you save time and avoid mistakes when you need to understand where your money is going every month.

How the Budgeting Calculator Works

To use our free budgeting calculator, just enter your monthly income and expenses. We’ll show you what percentage of your income you’re spending (or saving) in each category and whether you’re living within or beyond your means.

The output from using the budgeting calculator shows the percentage of your income that goes toward each category. Seeing the results in pie-chart form makes it easy to tell where most of your money goes. It breaks down your total monthly income and total monthly expenses while displaying the percentages of your income that are spent in specific areas. And it shows the total monthly funds that remain after you’ve accounted for all those expenses. The bigger the gap, the more extra funds you may have.

Key Components of a Budget Calculation

The categories below offer a basic framework that you can use to organize your expenses and think about the amounts that might be reasonable for you in each category. Everyone’s finances are different, and this calculator is a tool to help you, so use it in the way that makes the most sense for how you think about your money. You don’t have to allocate your expenses exactly as we describe.

Total Monthly Income

When calculating your total income, be sure to account for your entire household’s after-tax earnings. This includes all forms of income that contribute to your budget, such as salaries, freelance or part-time work, bonuses, child support, alimony, tips, Social Security benefits, dividends, settlements, and any other income sources. Remember, your budget should reflect the money you actually have available to spend.

Housing

Housing is often the largest expense in a budget, and a general guideline is to spend no more than 30% of your income on housing. However, many households exceed this limit. According to Harvard’s Joint Center for Housing Studies, households are considered “moderately cost-burdened” when they spend between 31% and 49% of their income on housing, and “severely cost-burdened” when housing costs exceed 50%. As of 2021, about 23% of U.S. households fell into one of these categories.

Include your rent or mortgage payments in this section, as well as any related costs like renters or homeowners insurance. If you own a home, make sure to account for maintenance fees and utilities such as electricity, gas, water, and waste disposal. While utility costs can be difficult to reduce without significant changes, small steps like weatherproofing your home can help lower energy usage. Additionally, expenses like property taxes and homeowners association fees should be included in your housing budget.

Food

In this category, include the cost of groceries for your household. Be sure to add any expenses for meal kits, dining out, and food delivery services. This will give you a comprehensive view of your total monthly food spending.

Transportation

According to the U.S. Bureau of Labor Statistics, the average household spent $12,295 on transportation in 2022, which accounted for about 11.6% of their pre-tax income. When budgeting for transportation, be sure to include costs like public transportation fares, car payments, insurance, fuel, parking, and tolls. Don’t forget to add expenses for ride-sharing services, taxis, and other transportation-related costs.

Education

Education costs can vary greatly depending on your situation. If you’re paying for your children’s or grandchildren’s education, or repaying student loans, include those expenses here. Though there’s no standard percentage of income to allocate to education, consider tax-advantaged savings options like a 529 plan or refinancing student loans to lower these costs.

Personal and Family Expenses

For dependents, this section should cover expenses that haven’t been included in other categories, such as cellphone bills, clothing, household items, and vacation savings. Entertainment costs, such as streaming services, event tickets, and memberships, should also go here, as well as personal care items like haircuts and pet-related expenses like food and vet bills.

Debt repayments, other than mortgages and student loans, also fall into this category. This includes credit card payments, personal loans, childcare, and charitable donations.

Healthcare

Healthcare expenses include medical, dental, and vision insurance premiums, along with deductibles, copays, and any out-of-pocket costs for medications or medical devices. While your premiums will likely stay consistent each month, other healthcare costs can fluctuate. Use your past spending to estimate an average monthly cost in this area.

Savings and Investments

If possible, aim to allocate 20% of your income toward savings and investments. This can include emergency savings, retirement accounts, or a college fund. If these goals are covered, consider using the extra funds for a down payment on a home or additional investment opportunities. You can also use this section to account for any other long-term savings goals.

Budgeting Techniques and Philosophies

Here are a few effective strategies for managing your personal finances. Consider whether one of these might fit your lifestyle:

50/30/20 Method

This popular approach suggests allocating 50% of your income to essential needs, 30% to discretionary spending, and 20% to savings and investments. If you have reduced housing expenses, like living with family or having a paid-off mortgage, you might be able to spend less on needs and put more towards savings or discretionary expenses. However, if your housing costs are higher—say, 50% of your income—you’ll need to cut back on other areas like wants or savings. The strength of this method lies in its flexibility; you can tweak the percentages based on your personal circumstances while still keeping a broad overview of your spending habits rather than focusing on every individual expense.

80/20 Method

A simpler alternative, the 80/20 method, sets aside 20% of your income for savings and investments, while you’re free to use the remaining 80% as you see fit. It’s ideal for those who prefer a low-maintenance approach to budgeting. Adjusting the ratio to fit your savings goals is easy, especially for those looking to retire early or accelerate their savings. For instance, some people might opt for a 70/30, 60/40, or even a 50/50 split, depending on their financial targets.

Zero-Based Budgeting

Zero-based budgeting is all about assigning every dollar of your income a specific job, so by the time you subtract all your expenses and savings, you’re left with zero. This method works well for individuals who prefer detailed control over their finances. Every category is accounted for, making it a great fit if you want to closely track where every dollar goes. However, if you have multiple income sources or a high number of monthly expenses, this approach can be time-consuming and may not be practical for everyone.

The Envelope System

With the envelope system, you assign a set amount of money to each spending category at the beginning of the month. Once you’ve exhausted the funds in a particular category, you’re done spending in that area unless you move funds from another category. For example, if you’ve budgeted $80 for your electricity bill but it turns out to be $100, you’d need to take $20 from another category, like groceries, to make up the difference.

Originally, this system involved physically placing cash into labeled envelopes, but today, many people use apps or spreadsheets to manage it. This approach is particularly useful if you’re working with a tight budget or trying to curb overspending, offering a clear limit on what you can spend in each area.

Benefits of Using a Budget

Budgeting may feel like another task to add to your already busy schedule, but the time and effort are well worth it. If you’re skeptical about the value of budgeting, here are four key reasons why it’s a game changer for your finances:

Benefit 1: Maximize the Value of Your Work

You likely spend 20 to 50 hours a week earning money, but without a clear budget, you might not be getting the most out of those hours. By tracking and consciously managing your spending and savings, you ensure that your hard-earned money is working for you, not slipping through the cracks. Failing to budget can mean you’ll end up spending more time working and less time doing what you enjoy, like spending time with loved ones or pursuing personal interests.

Benefit 2: Take Control of Your Finances

When money is tight, it’s easy to feel like your expenses are out of control. However, by creating a monthly budget, you can regain control over where your money goes. Budgeting allows you to make proactive decisions about your spending and identify areas where you could save more or pay down debt faster. It transforms your financial situation from something that happens to you into something you actively manage, giving you a greater sense of empowerment.

Benefit 3: Work Toward Your Goals

Whether your goal is to travel, buy a car, or transition to a single-income household, a budget is a powerful tool to help you achieve it. Budgeting gives you the clarity to set realistic financial goals and make informed choices about where your money should go. By aligning your spending with your priorities, you can steadily move toward your dreams without feeling financially overwhelmed.

Benefit 4: Spot Potential Issues Before They Escalate

A budget helps you identify financial issues before they turn into larger problems. For instance, if you only have $30 left at the end of the month to pay down a credit card balance, you’ll quickly see that this could put you at risk of staying in debt longer than necessary. While a budget won’t solve these challenges overnight, it provides a clear picture of where adjustments need to be made. You can then take steps like improving your credit score to refinance debt or researching more affordable education options.

In short, budgeting isn’t just about cutting back—it’s about making smarter, more intentional decisions with your money to improve your overall quality of life.