This clever budgeting technique will help you to effectively manage your personal finances and understand how you should divide your budget between your needs, wants and savings. This is how it works.
50% of your after-tax income goes towards needs, which are expenses you have to cover each month. These include housing, transport, insurance and debt repayments.
30% of your after-tax income is put towards your wants, which are expenses that are not essential but improve the quality of your life and give you a chance to enjoy the money you work so hard to earn. Examples of wants are entertainment, hobbies, take-aways and streaming services.
20% of your after-tax income is put towards your savings, including your retirement and emergency fund savings as well as your savings goals like holidays and education etc.
So go on, have some fun with this calculator and see how your budget should be split up!
Needs (50%)
Wants (30%)
Savings (20%)
Like so many of us, you might be spending too little on your savings. Set a monthly savings goal to work towards and try to put aside a little more of your salary each month.
Our user-friendly calculators are here for you to gain the insights you need in making the smart choices that will empower you to protect and grow your wealth. The calculators do not provide any advice or recommendation in relation to the suitability of any products.
It’s important to note that the calculations are only estimates, based on your inputs and assumptions. Interest rates are a factor in all of them, and these vary from one financial services provider to another and are influenced by several factors including your credit history.
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