Budget Calculator

What counts as a need

A need is something you cannot stop paying next month without a serious consequence: housing, utilities, groceries, transport to work, insurance, minimum debt payments. Not the grocery budget you would like — the one that keeps you fed. Most people who find their needs at 70 per cent have classified wants as needs, which is worth checking before concluding the framework does not fit.

When 50/30/20 genuinely does not fit

In an expensive housing market, rent alone can exceed 50 per cent of take-home pay. The framework is then diagnostic rather than prescriptive: it tells you housing is consuming the budget, which is real information even when it is not immediately actionable. The response is usually to change the housing or the income, not to reclassify the categories.

Zero-based budgeting as the alternative

Zero-based means every dollar is assigned a job until nothing is unallocated — including assignments like “next car” or “holiday fund”. The unallocated figure at the top of this page is the zero-based view: whatever is left over is money without instructions, and money without instructions is usually spent.

Why a budget fails in month three, and what to do about it

Most budgets collapse on irregular expenses, not on groceries. Car registration, an annual insurance premium, a dental bill and a birthday all arrive on their own schedule, so a month that contains one looks like a failure against a plan built from a typical month. The fix is to treat them as monthly costs: total the year's irregular spending, divide by twelve, and hold that amount as a separate sinking fund. It stops one predictable bill from being recorded as overspending.

The other common failure is budgeting from gross pay. The 50/30/20 split is defined against take-home pay, after tax and after payroll deductions, because that is the money that actually arrives. If retirement contributions come out before the money hits your account, they are already saved and should not be counted again in the 20 per cent, or the plan double-counts and the needs category gets squeezed for no reason.

Frequently Asked Questions