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Money rules checkup

Your own numbers against three classic money rules of thumb, and where each one breaks.

4 questions. Typical defaults fill the rest; your result lists them.

Essentials Start here.

What reaches your account each month, after tax.

Housing, food, transport, insurance, minimum debt payments.

Money set aside each month instead of spent.

Money you could reach in a few days, such as bank accounts.

Fine-tune Sharpens the answer. Leave a box blank if you are unsure.

Optional. Only used for the debt-to-income line.

Optional. Only used for the debt-to-income line.

Private: calculated in your browser, never sent. Any currency works; read $ as yours.

Your result

Example result

Share of pay saved

15%

Months of essentials your cash covers

4 months

From left: essentials 55%, everything else 30%, saved 15% of pay. The 50/30/20 rule of thumb uses 50%, 30% and 20%.
Dashed box: the 3 to 6 months rule of thumb.

At these inputs, 15% of pay is saved, and cash covers about 4 months of essentials.

Example numbers: Take-home pay per month $6,000 · Essentials per month $3,300 · Saved or invested per month $900 · Cash savings today $13,200. Type your own numbers above to replace this example.

How this calculator works: the formulas, what the result means and its limits

How the money rules checkup works

It puts your own monthly numbers next to three rules of thumb: quick shortcuts that people use to talk about a budget. It describes the numbers. It does not judge a household or say what to do with money.

Essentials = essentials ÷ take-home pay. Saved = saved ÷ take-home pay. Everything else = 100% − essentials − saved. Months of cash = cash ÷ essentials. Debt-to-income = debt payments ÷ income before tax.

Worked example. Take-home pay 6,000, essentials 3,300, saved 900 and cash savings 13,200 a month. Essentials are 3,300 ÷ 6,000 = 55.00% of pay, saved is 15.00% and everything else is 30.00%. The 50/30/20 rule of thumb uses 50%, 30% and 20%. Cash covers 13,200 ÷ 3,300 = 4.00 months of essentials. By the 3 to 6 months rule of thumb, the cash amounts are 9,900 and 19,800. With debt payments of 600 and income before tax of 8,000, debt payments are 7.50% of income.

Where this rule breaks

  • 50/30/20: in high-cost cities essentials alone can pass 50% of pay. With irregular income, one month says little about the next.
  • 3 to 6 months: variable income, one earner in the household or high fixed costs may call for more months. Steady income may need fewer.
  • Debt-to-income: lenders use different limits, and the ratio leaves out everything except debt payments.
  • All of them: one fixed number cannot reflect your costs, your city or your plans. They are a starting point for questions, not an answer.

Frequently asked questions

What is the 50/30/20 rule?

It is a rule of thumb that splits take-home pay into 50% for essentials, 30% for everything else and 20% for saving. It comes from the book All Your Worth, from 2005. It is a starting point for talking about a budget, not a measure of any one household.

Why 3 to 6 months of essentials?

It is common guidance for how much cash to hold in case income stops or a large bill arrives. The range is a rule of thumb, not a standard. Steady income and shared costs are often described as needing fewer months, and variable income as needing more.

Which costs count as essentials?

Here they are the costs that continue whatever happens: housing, food, transport, insurance and minimum debt payments. Where a cost sits between essentials and everything else is a personal call, and it moves the result a lot.

What is the debt-to-income line?

It is monthly debt payments divided by monthly income before tax. Lenders look at a similar ratio, and each lender uses its own limits. The line shows only when both numbers are entered.