Budget Calculator
Result
Left to allocate
- Total allocated
- 4,500.00
- Savings rate
- 20.00%
- Debt-to-income ratio
- 10.00%
A monthly budget is a division rather than a forecast: one month's income cut into the things it has to cover, leaving a remainder that is either what is left over or what is missing. This calculator takes four numbers — the income, what living costs, what goes to savings and what goes to debt — and returns the amount left unallocated, the total that was allocated, the share of income saved and the share of income going to debt. The last two are worth dwelling on: both are measured against the same monthly income, so they can simply be added, and a savings rate of twenty percent alongside a debt-to-income ratio of ten percent means thirty percent of the income is spoken for. Reading the four together is the point, because the remainder is the answer most people are looking for and it is allowed to be negative — a budget that does not balance is a finding, not a failure.
What six savings rates are worth on a 5,000 monthly income
| Savings rate | Saved each month | Saved over a year |
|---|---|---|
| 0 | 0 | 0 |
| 5 | 250 | 3000 |
| 10 | 500 | 6000 |
| 15 | 750 | 9000 |
| 20 | 1000 | 12000 |
| 30 | 1500 | 18000 |
The axis is the savings rate, because that is the question this table answers: put this share of the income aside and what does it come to. The monthly income is held at 5,000, which is the calculator's default, so a reader can leave that field alone and match the rate to reproduce any row. The middle column is the arithmetic and the last column is simply twelve of it. That last point is worth stating plainly rather than leaving to be assumed: the annual figure contains no interest, no return and no growth of any kind, because this page has no rate of return among its fields. Twelve months of saving 1,000 is 12,000 here and will be more than that in an account that pays interest — that calculation belongs to a compound interest page, not this one. Read the first and last rows together for the range: saving nothing produces a straight zero at any horizon, and saving thirty percent of a 5,000 income produces 18,000 over a year.
Formula
Total allocated = living expenses + savings + debt payments; remaining = monthly income − total allocated; savings rate = savings ÷ monthly income × 100; debt-to-income ratio = debt payments ÷ monthly income × 100
- Monthly income
- What comes in over the month, after tax, which is the money there is to divide. It is also the denominator of both ratios, which is why it cannot be zero — and why the two percentages are directly comparable with each other.
- Living expenses
- Everything the month costs to live: housing, food, transport, utilities, insurance, the subscriptions. This is usually the largest of the three and the one where the least is fixed, which is exactly why seeing it written down against the others tends to do something.
- Savings
- What is set aside rather than spent. Whether it is a transfer to a savings account, a pension contribution or cash kept at home does not matter here; what matters is that it is the part of the income not consumed this month.
- Debt payments
- The minimum payments due on borrowing, plus anything extra being paid down. Interest on the debt is already inside those payments, so it is not a separate line — it is the cost of having the balance in the first place.
- Total allocated
- Living expenses plus savings plus debt payments. It and the remaining amount always add back to the monthly income, which is what makes the panel checkable: any two of the three figures determine the third.
- Remaining
- Income minus everything allocated. A positive figure is money the plan has not assigned anywhere yet; a negative one means the month is overspent, and it is a normal answer rather than an error — seeing the shortfall is usually the reason for doing the calculation.
- Savings rate
- Savings as a share of income, on the same denominator as the debt ratio below it. It is what the month left for the future, and it is the single figure here that a change in spending moves most directly.
- Debt-to-income ratio
- Debt payments as a share of income. It is the same ratio a mortgage underwriter looks at when deciding what someone can borrow, which is a useful thing to know when the number is high — though nothing on this page judges it.
Use it when the month is the unit you are working in: drawing up a plan at the start of one, or taking apart what happened at the end of one. It answers a division question — where the money went and what is left — and it deliberately answers nothing else, which is worth knowing before you look for more in the panel. It will not tell you what a good savings rate is, because the right one depends on a goal and a deadline that are not fields here; it will not tell you how long a savings goal takes to reach, because that needs a starting balance and a return, neither of which it has; and it says nothing about net worth, which is a stock measured at a moment rather than the monthly flow this page works in. If the answer comes back negative, that is the page working rather than failing — the four fields are allowed to exceed the income, and the shortfall is the useful output.
Worked examples
The default: 5,000 in, 3,000 living, 1,000 saved, 500 to debt
- Total allocated: 3,000 + 1,000 + 500 = 4,500
- Remaining: 5,000 − 4,500 = 500
- Savings rate: 1,000 ÷ 5,000 = 20 percent
- Debt-to-income ratio: 500 ÷ 5,000 = 10 percent
Four numbers that add up two ways and both are worth seeing. The allocated total plus the remainder is the income, so 4,500 + 500 = 5,000; and the two ratios share the income as their denominator, so they can be added as well — 20 percent saved and 10 percent to debt means 30 percent of the month committed, leaving the 500 unassigned. That second addition works only because both are measured against the income rather than against each other.
A month that does not fit: 3,000 of income against 3,500 of commitments
- Total allocated: 2,800 + 400 + 300 = 3,500
- Remaining: 3,000 − 3,500 = −500
- Savings rate: 400 ÷ 3,000 = 13.33 percent
- Debt-to-income ratio: 300 ÷ 3,000 = 10 percent
Nothing in this example is an input error. Every field is a plausible number and they do not fit, which is the situation the page is most useful in: a plan that only balances on paper is not a plan. The two ratios still compute normally, since their denominator is the income and a shortfall does not disturb it — but reading a savings rate of 13.33 percent off a month that is 500 short is exactly the sort of thing this panel is meant to expose.
Odd money: 6,500.50 of income with cents everywhere
- Total allocated: 4,200.25 + 900.50 + 600.75 = 5,701.50
- Remaining: 6,500.50 − 5,701.50 = 799
- Savings rate: 900.50 ÷ 6,500.50 = 13.85 percent
- Debt-to-income ratio: 600.75 ÷ 6,500.50 = 9.24 percent
A realistic month rather than a round one, and the arithmetic survives it: the remainder is derived from the rounded allocated total rather than from the raw sum, so subtracting the printed 5,701.50 from the printed 6,500.50 gives the printed 799 exactly. That is a small thing that matters, because a reader who checks the panel by hand and finds a cent missing has no way to tell a rounding choice from an error.
Nothing left over: 5,000 in and 5,000 out
- Total allocated: 3,500 + 1,000 + 500 = 5,000
- Remaining: 5,000 − 5,000 = 0
- Savings rate: 1,000 ÷ 5,000 = 20 percent
- Debt-to-income ratio: 500 ÷ 5,000 = 10 percent
A zero remainder is a plan that assigns every unit of income, and it should not be read as a missing value — the line prints 0.00 because that is the answer. It is the boundary between the two examples above it, and the case people most often mistake for an error in the other direction: a budget that balances exactly looks like nothing happened, when in fact all four fields were used and the division came out level.
Saving almost nothing: 1 spent, 99 to debt, out of 5,000
- Total allocated: 4,900 + 1 + 99 = 5,000
- Remaining: 5,000 − 5,000 = 0
- Savings rate: 1 ÷ 5,000 = 0.02 percent
- Debt-to-income ratio: 99 ÷ 5,000 = 1.98 percent
One unit of currency saved out of five thousand prints as 0.02 percent rather than rounding away to nothing, and that distinction is the whole reason the field takes two decimals: 0.02 percent and 0.00 percent mean different things on this page, because one of them is a plan that saves nothing at all. The same reasoning applies at the top of the range — a plan that saves everything shows 100 percent, which is a real answer and not a cap being hit.
Limitations
This is a plan for one month, and it is a plan rather than a record — the fields hold what you intend, and nothing on the page checks them against a bank statement. Irregular income is the hardest case for it: a freelancer or a seasonal worker has to choose between averaging the year, which hides the lean months, and budgeting for the worst one, which hides the rest. Annual and quarterly costs are the other common trap, since insurance, car maintenance and tax bills do not arrive monthly and a plan that ignores them will balance every month until one of them lands. The savings figure is money set aside and not money grown: no interest or return is modelled anywhere on this page, so a pattern of saving the same amount every month is a straight line here and compounding is somewhere else. And all four fields have to be in the same currency, which the arithmetic cannot check — mixing them silently produces a remainder that means nothing.
Frequently asked questions
- Can the remaining amount be negative?
- Yes, and it is one of the most useful answers the page gives. The three spending fields are each allowed to exceed the income, so a month that commits more than it earns prints a negative remainder rather than an error. That is the calculation doing its job: the shortfall has to be covered by borrowing, by savings or by cutting something, and seeing the size of it is usually the reason for doing the sum in the first place. The only guard on the page is income greater than zero, since there is nothing to divide otherwise.
- Can I add the savings rate and the debt-to-income ratio?
- Yes, and that is deliberate. Both are measured against the same monthly income rather than against each other or against the total allocated, so a savings rate of 20 percent and a debt ratio of 10 percent mean 30 percent of the income is committed and 70 percent is not. Adding them only works because the denominator is shared; if the debt ratio had been defined against the allocated total instead, the two numbers would not be comparable and adding them would be meaningless. It is the most common thing people do with these two figures, so the fields were chosen to make it valid.
- What count as living expenses?
- Everything the month costs to live in: housing, food, transport, utilities, insurance, phone, subscriptions, and the small recurring things that are individually trivial and collectively not. What matters more than the categories is that the split is consistent month to month, because the value of the panel comes from comparing one month against the next. If something is genuinely irregular, the honest treatment is to divide the annual cost by twelve and put that in rather than to leave it out until the month it lands.
- Does this tell me how much I should be saving?
- No, and it should not try. A savings rate is only meaningful against a goal and a deadline, and neither is a field on this page — saving nothing may be entirely correct for someone paying down high-interest debt, and saving thirty percent may be too little for someone retiring in five years. There is no rate that is right in general, which is why the page reports what your numbers do rather than what they ought to be, and why no rule of thumb is quoted here: the popular ones are widely repeated and none of them is traceable to a source that could be cited.
- What is the difference between this and a net worth calculator?
- Flow against stock. This page is about one month — money coming in and money going out, which is a rate. Net worth is a balance at a moment: everything owned minus everything owed, which is a snapshot. They are related but neither can be derived from the other, and someone can have a healthy monthly surplus and a negative net worth, or a large net worth and a monthly deficit. If the question is where the month went, this is the page; if it is what you are worth, that is a different one.
- How do I handle income that is not the same every month?
- Pick a convention and keep it, because the page cannot know which month you meant. Averaging the last twelve months is the usual choice and it matches the annual view, at the cost of hiding the lean months inside a comfortable figure. Budgeting against the worst recent month is the conservative alternative and it is safer for anyone with volatile income, at the cost of showing a surplus that is not really there. Whichever you use, putting the same figure in every month is what makes two months comparable.
References
- Money Smart — the FDIC's financial education programme, whose budgeting material covers the same division this page performs: income split across what must be paid, what is being saved and what is owed — Federal Deposit Insurance Corporation (United States)
- Selling Guide B3-6-02, Debt-to-Income Ratios — how a mortgage underwriter works out the debt-to-income ratio this panel prints; its thresholds are a lender's rules for mortgage approval and are not applied here — Fannie Mae Selling Guide, Fannie Mae (United States)
- Savings — the glossary definition of income set aside rather than spent, which is the sense in which the savings field above is meant and the reason it is not the same thing as investing — Investor.gov, U.S. Securities and Exchange Commission (United States)