Simple Budget Calculator: See Exactly Where Your Money Goes

How to Use Our Budget Calculator

To build your budget, start by entering your income and then fill in your monthly expenses. Be as accurate as possible—it’s helpful to have recent bank statements or bills on hand.

1. Monthly Income (After-Tax) Enter your total monthly take-home pay. This is the amount you receive in your bank account after taxes and other deductions (like health insurance or 401(k) contributions) have been taken out. If you have an irregular income, use an average of the last few months or your lowest estimated amount.

2. Monthly Expenses Enter your typical spending for each category below. Don’t worry if it’s not perfect; estimates are a great starting point.

• Housing: Your mortgage or rent payment. Include property taxes and HOA fees if they aren’t part of your mortgage payment.

• Utilities: The monthly total for electricity, water, natural gas, internet, and trash service.

• Transportation: Include your car payment, car insurance, fuel costs, and any public transit passes.

• Food & Groceries: All spending at supermarkets and for household supplies.

• Restaurants & Takeout: All spending on dining out, coffee shops, and food delivery services. Tracking this separately from groceries is key to identifying spending habits.

• Debt Payments: The minimum monthly payments for any credit cards, student loans, or personal loans.

• Health & Medical: Health insurance premiums (if not deducted from your paycheck), plus any regular co-pays or prescription costs.

• Personal & Shopping: Spending on clothing, hobbies, personal care, and general shopping.

• Entertainment: Costs for streaming services (Netflix, etc.), concerts, movies, and other leisure activities.

• Savings & Investments: The amount you actively transfer to a savings account, retirement fund (like an IRA), or other investments each month. This is you paying your future self.

Understanding Your Results

After you fill in your information, the calculator provides one crucial result: your Monthly Surplus or Shortfall. This number is your income minus your total expenses.

(A pie chart visually breaking down expense categories would be displayed here)

• If You Have a Surplus (Positive Number): Congratulations! This means you are spending less than you earn. This extra money is your most powerful wealth-building tool. You can use it to:

  • Pay off high-interest debt faster.

  • Build or increase your emergency fund.

  • Boost your retirement savings.

  • Save for a large purchase like a down payment or vacation.

• If You Have a Shortfall (Negative Number): Don’t panic. This is a common discovery and the first step toward fixing it. It means you are spending more than you earn. Your next step is to review your “Wants vs. Needs” in the expense categories and find areas to cut back.

How Does Your Budget Compare? The 50/30/20 Rule

A helpful benchmark for a balanced budget is the 50/30/20 rule. It provides a framework for allocating your after-tax income.

Compare the breakdown from the calculator’s pie chart to this rule. Are you spending 70% on Needs? Or only 5% on Savings? This comparison can instantly highlight which areas of your budget need the most attention.

Frequently Asked Questions

What is the best budgeting method?

The best method is the one you can stick with. Besides the 50/30/20 rule, another popular method is the Zero-Based Budget. With this method, you assign every single dollar of your income to a specific job (an expense, a savings goal, or debt repayment). Your income minus your expenses equals zero at the end of the month. This is great for people who want maximum control and to be very intentional with their money.

How do I budget with an irregular or variable income?

Budgeting with a fluctuating income is challenging but possible. The most effective strategy is to:

1. Calculate Your Baseline: Look at your income over the last 6-12 months and find your lowest-earning month.

2. Build Your Budget: Create your monthly budget based on that lowest-income figure. This covers all your essential “Needs.”

3. Create a Plan for the “Extra”: In months where you earn more than your baseline, that extra money is allocated in a specific order: first to fill any gaps from bad months, then to aggressive debt payoff, and then to savings goals.

I have a budget, but I can never stick to it. What should I do?

This is the most common problem. Here are some tips to improve your consistency:

• Be Realistic: If your first budget cuts all “fun” spending to zero, you’re setting yourself up to fail. Allow for small wants.

• Automate Your Savings: Set up automatic transfers from your checking to your savings account the day you get paid. This pays your “Savings” goal first, before you have a chance to spend the money.

• Try a Cash Envelope System: For problem categories like “Restaurants” or “Shopping,” withdraw a set amount of cash for the month. When the cash is gone, you’re done spending in that category.

• Review and Adjust: A budget isn’t a “set it and forget it” document. Review your spending weekly or bi-weekly to see how you’re tracking and make adjustments.

What should I prioritize first: paying off debt or saving money?

This is a critical question, and financial experts generally recommend a balanced approach.

Concrete Example: Imagine you have a $200 monthly surplus. You have a $5,000 credit card balance at 22% APR and only $200 in savings.

1. Step 1: Build a Starter Emergency Fund. Before attacking debt, save up a small emergency fund of $500 to $1,000. This buffer prevents a minor emergency (like a flat tire) from forcing you to take on more debt. You’d use your $200 surplus for 3-5 months to achieve this.

2. Step 2: Attack High-Interest Debt. Once you have that small cushion, switch gears. Paying off a 22% APR credit card provides a guaranteed 22% “return” on your money—you won’t find that in any safe investment. Throw your entire $200/month surplus at the credit card while making minimum payments on other debts.

3. Step 3: Build a Full Emergency Fund. After high-interest debt is gone, direct the surplus to building a full emergency fund that covers 3-6 months of essential living expenses.

How can I cut my expenses without feeling totally deprived?

Focus on the “big three” (housing, transportation, food) for the largest impact, but also look for quick wins.

• Food: Challenge yourself to one fewer takeout meal per week. That could easily save $100+/month.

• Subscriptions: Conduct a “subscription audit.” Cancel any streaming services, apps, or memberships you don’t use regularly.

• Utilities: Call your cell phone or internet provider and ask if you’re on the best plan or if they have any new promotions. This 15-minute call can save you hundreds per year.

Take the Next Step

Now that you have a budget, you can start setting clear financial goals. Use our Savings Goal Calculator to see how long it will take to save for a down payment or a new car. If your budget revealed that debt is your biggest challenge, our Debt Payoff Calculator can create a strategy for becoming debt-free.