Monthly Budget Calculator

How to calculate your monthly budget?

A monthly budget is a financial plan that helps you balance your cash flow by tracking every dollar you earn against every dollar you spend. By identifying where your money goes, you can make informed decisions about your spending and saving habits.

Balance = Total Income - Total Expenses

Using the budget calculator: an example

Suppose your total take-home income is $5,000 per month. After listing all your costs—including rent, food, and utilities—your total expenses equal $4,200. Using the formula, your remaining surplus would be $800.

Step-by-step calculation:

1. List all sources of income, including your main salary and any side projects.
2. Total all fixed and variable expenses to see the complete picture of your spending.
3. Subtract expenses from income to find your surplus (savings) or deficit.

Consistently tracking these numbers allows you to adjust your lifestyle and ensures that you are always working toward your long-term financial goals.

Frequently Asked Questions

What is the 50/30/20 rule?
This rule suggests spending 50% of your income on needs, 30% on wants, and 20% on savings or debt repayment. It provides a simple benchmark for maintaining a sustainable and healthy financial life.

What if I have a monthly deficit?
If you are spending more than you earn, review your variable expenses like dining out or entertainment. Reducing these non-essential costs is the fastest way to bring your budget back into the green.

Should I include one-time annual costs?
Yes, you should account for them by taking the total annual cost and dividing it by 12. Including this fraction in your monthly budget prevents large, infrequent bills from derailing your finances.