Budget Planner

This calculator helps you work out where your money is going, customise item names, and save your results. All changes auto-save as you type.

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Total Expenses $0.00
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Based on the ASIC MoneySmart budget planner spreadsheet. View original

The 50/30/20 Budgeting Guide: How to Allocate Your Income

Originally popularized by bankruptcy expert and Harvard law professor Elizabeth Warren, the 50/30/20 rule is an intuitive, proportional budgeting framework designed to balance immediate lifestyle requirements with long-term financial security and debt freedom.

50% of Net Income

Essential Needs

Non-negotiable living costs required for basic survival and maintaining employment: rent or minimum mortgage payments, essential groceries, household utilities (electricity, water, gas), commuter transport, basic healthcare, and mandatory minimum debt service.

30% of Net Income

Discretionary Wants

Lifestyle enhancements and personal enjoyment: dining out, entertainment subscriptions (streaming, gaming), vacations, gym memberships, clothing upgrades beyond basic necessity, and leisure activities that enrich your day-to-day life.

20% of Net Income

Savings & Debt Paydown

Wealth-building vehicles and accelerated debt reduction: creating a 3-to-6 month emergency cash reserve, voluntary extra principal repayments on your mortgage, index fund investing, and additional superannuation contributions.

In-Depth Expense Category Breakdown

Accurate budgeting depends on classifying expenses correctly between fixed commitments, variable necessities, and periodic sinking funds:

Fixed vs. Variable Expenses

Fixed costs stay constant each month (e.g., broadband, loan payments), making them predictable. Variable costs fluctuate (e.g., groceries, utility bills). Reviewing variable trends every quarter helps identify seasonal spending creep.

The Sinking Funds Strategy

Irregular annual bills (car registration, comprehensive insurance renewals, council rates) often blow budgets apart. Divide expected annual costs by 12 and transfer that sum into a dedicated sub-account every month so renewals never catch you off-guard.

Handling High Cost of Living

In competitive metropolitan housing markets, essential needs may consume 60% or 65% of net income. If so, adjust your target to a temporary 60/25/15 or 65/20/15 allocation, prioritizing minimum debt paydown while protecting an emergency buffer.