How this budget calculator works
A budget is a plan for your income and spending. This budget calculator is a free budget tool that works as a monthly budget calculator and a simple budget planner: enter your income before tax, your income tax rate, and what you spend, then see what is left over or how far short you fall.
Every amount can be monthly or yearly, so you can enter rent per month and a salary per year. The result shows each total both ways, your debt-to-income ratio, and how your spending splits across categories.
For example, $73,800 of yearly income at a 22% tax rate leaves $57,564 after tax. Yearly spending of $48,480 would leave $9,084, or about $757 a month.
How the numbers are calculated
Income after tax = income before tax × (1 − tax rate)
Left over = income after tax − total expenses
The tax rate applies to all income as one combined rate, so use your overall rate rather than your top tax bracket. Pre-tax 401(k), IRA, and college contributions count at their after-tax cost, because the income they use is not taxed here. At a 22% tax rate, a $1,000 contribution counts as $780. Percentages in the category table are shares of income after tax.
Your debt-to-income ratio
Your debt-to-income (DTI) ratio compares debt and housing payments with income before tax. It appears once you enter a mortgage, car payment, or other debt payment. Lenders use it to judge how much more you can comfortably borrow.
- Front-end DTI counts housing costs only: mortgage or rent, property tax, home insurance, and HOA fees.
- DTI adds car payments, credit card payments, student loans, and other loans.
Here, a DTI under 35% is rated good, 35% to under 50% is acceptable, and 50% or more is very high. Each lender sets its own limits, so treat these as rough guides. Utilities, insurance on a car, and everyday expenses are not part of DTI.
How to make a budget
- Add up your income from every source.
- List fixed bills such as rent, insurance, and loan payments.
- Estimate spending that changes from month to month, using a few recent bank and card statements.
- Spread yearly costs, such as travel or car repairs, across the year.
- Set an amount for savings before spending on extras.
- Compare the total with your income, and adjust until it balances.
Frequently asked questions
What is the 50/30/20 budget rule?
The 50/30/20 rule is a popular guideline that puts 50% of after-tax income toward needs, 30% toward wants, and 20% toward savings and extra debt payments. This calculator doesn't apply the rule for you, but its percentages let you compare your own numbers.
How much should I spend on rent?
A common rule of thumb is to keep rent at or below 30% of your income before tax. It is only a starting point, since high-cost areas often make that hard. To check, divide your rent by your income before tax. The Housing and utilities share in the results is a different number: it includes utilities and is a share of income after tax.
How much of my income should I save?
A common target is 15% or more of your income. If you enter savings that come to less than 15% of after-tax income, the results point that out.
How do I budget money if my income changes?
Base your budget on a lower-than-average month. Cover essentials first, then put anything extra toward savings or debt in the months you earn more.
Limitations
This calculator is a planning tool, not financial or tax advice. It applies one flat tax rate rather than calculating your actual tax bill, and the results are only as good as the amounts you enter.
What's changed
- Launched.
References
- Fannie Mae Selling Guide — Debt-to-Income Ratios
the DTI ratio compares total monthly obligations, including the housing payment and other debts, with total monthly income
- IRS Topic 424 — 401(k) plans
401(k) contributions can be made on a pre-tax basis, which is why they count at their after-tax cost here