This budget calculator splits your monthly after-tax income into three amounts: needs, wants, and savings and debt repayment. Pick the 50/30/20 rule, one of two alternative splits, or enter your own percentages, and it shows the monthly and annual dollar amount for each category.
How to use the budget calculator
- Enter your monthly after-tax income. Use the amount that reaches your bank account, not your salary. If you only know your gross pay, the salary after tax calculator estimates take-home pay after income tax, CPP and EI for your province. If you are paid every two weeks, multiply one paycheque by 26 and divide by 12 to get a monthly figure.
- Choose a split. The menu offers 50/30/20, 70/20/10 and 60/30/10. Choose Custom to enter your own needs, wants and savings percentages; the calculator flags it if they don’t add up to 100%.
- Press calculate. The results show the dollar amount for each category per month, plus the annual totals.
The three categories follow the usual definitions: needs are costs you can’t easily avoid (housing, groceries, utilities, insurance, transportation, minimum debt payments), wants are discretionary spending, and savings and debt repayment covers contributions to savings and investment accounts plus payments above the minimum on debts. The 50/30/20 budget rule guide explains where common expenses fall and how the rule works on a Canadian income.
Choosing a split
| Split | Needs | Wants | Savings and debt | When people use it |
|---|---|---|---|---|
| 50/30/20 | 50% | 30% | 20% | The standard starting point |
| 60/30/10 | 60% | 30% | 10% | Heavy fixed costs, wants kept as they are |
| 70/20/10 | 70% | 20% | 10% | Expensive housing, often as a short-term plan |
| Custom | You choose | You choose | You choose | Any other split, such as 60/20/20 |
In Toronto, Vancouver and other expensive housing markets, rent or a mortgage alone can take up much of the needs share, which is why the 60/30/10 and 70/20/10 options exist. Trimming the wants share instead of the savings share (a 60/20/20 split, entered as Custom) leaves savings at 20%. To compare a split with what households actually spend, average household expenses in Canada has the Statistics Canada figures by category.
Reading the results
- Needs: compare the figure with your actual fixed costs. If rent, transportation and other essentials already exceed it, either the split or one of those costs has to change.
- Wants: this is the amount for dining, entertainment, shopping and travel. Some people move part of it into separate envelopes or sub-accounts; the envelope method works this way.
- Savings and debt: setting this amount up as an automatic transfer on payday is the idea behind paying yourself first. It can go to an emergency fund, a TFSA, RRSP or FHSA, or extra debt payments.
The calculator works with three broad buckets. A full budget breaks each one into categories and adds the yearly costs that don’t come monthly; Budgeting 101 walks through how to make a budget line by line, and the budgeting section compares the other budgeting methods.
Budgeting with a partner
Couples sharing expenses often split shared needs either equally or in proportion to each partner’s income, and keep personal spending money for each person within the wants share. Financial planning for couples covers the options in more detail.
Related calculators
- Savings goal calculator: how long a savings target takes at a given monthly deposit.
- Emergency fund calculator: how big an emergency fund to aim for.
- Salary after tax calculator: gross salary to take-home pay.
- Salary calculator: hourly wage to annual salary and back.
- Debt payoff calculator: a plan to pay down debt.
- Income tax calculator: federal and provincial tax on your income.