Budget Calculator
A budget calculator helps you allocate your income across spending categories, track expenses, and ensure you're saving enough for financial goals. The right budget creates a plan for every dollar.
The 50/30/20 Budget Rule
| Category | Percentage | Example ($5,000 income) |
|---|---|---|
| Needs | 50% | $2,500 |
| Wants | 30% | $1,500 |
| Savings/Debt | 20% | $1,000 |
Budget Breakdown by Category
Needs (50%): Rent/mortgage, utilities, groceries, insurance, minimum debt payments, transportation to work, healthcare
Wants (30%): Dining out, entertainment, subscriptions, hobbies, vacations, upgrades
Savings (20%): Emergency fund, retirement, debt payoff above minimums, other savings goals
Budget Calculator Implementation
``javascript
function calculateBudget(monthlyIncome, method = '50-30-20') {
const budgets = {
'50-30-20': { needs: 0.50, wants: 0.30, savings: 0.20 },
'70-20-10': { needs: 0.70, wants: 0.20, savings: 0.10 },
'80-20': { needsAndWants: 0.80, savings: 0.20 },
'aggressive': { needs: 0.50, wants: 0.20, savings: 0.30 }
};
const allocation = budgets[method] || budgets['50-30-20'];
const result = {};
for (const [category, percent] of Object.entries(allocation)) {
result[category] = {
percent: (percent * 100) + '%',
monthly: (monthlyIncome * percent).toFixed(2),
weekly: (monthlyIncome * percent / 4.33).toFixed(2)
};
}
return result;
}
console.log(calculateBudget(5000, '50-30-20'));
// { needs: { percent: '50%', monthly: '2500', weekly: '577.37' }, ... }
`
Adjusting Your Budget
If you can't fit into 50/30/20, focus on reducing the largest category first (usually housing). Consider increasing income, reducing wants, or finding a more aggressive savings method once high-interest debt is paid.
The Four Percentage Questions
Almost every percentage problem is one of these, and mixing them up is the most common
arithmetic error there is:
| Question | Formula | Example |
|---|---|---|
| What is X% of Y? | Y × (X ÷ 100) | 15% of 80 = 12 |
| X is what % of Y? | (X ÷ Y) × 100 | 12 is 15% of 80 |
| X is Y% of what? | X ÷ (Y ÷ 100) | 12 is 15% of 80 |
| % change from X to Y | ((Y − X) ÷ X) × 100 | 80 → 92 is +15% |
Percentage Points Are Not Percent
A rate moving from 4% to 5% is one percentage point, and a 25% increase. Both
statements are true and they are not interchangeable — headlines routinely use the smaller
one when reporting a rise and the larger one when reporting a fall.
Increases and Decreases Do Not Cancel
| Start | Change | Result |
|---|---|---|
| 100 | +50%, then −50% | 75 |
| 100 | −50%, then +50% | 75 |
| 100 | −20%, then +25% | 100 |
The reason is that the second percentage applies to a different base. To reverse a −20% you
need +25%, not +20%. This is why a stock that falls 50% must double to break even, and why
"we cut costs 30% then grew 30%" leaves you 9% down.Reversing a Percentage
To find the price before a 20% discount, divide by 0.8 — do not add 20%:
`
before = after ÷ (1 − discount)
$80 ÷ 0.8 = $100 ✓
$80 × 1.2 = $96 ✗
``
The same asymmetry applies to tax, tips, markups and platform fees.