Free Financial Compass

Understanding Your Budget

A budget is the cornerstone of financial health. It's a simple plan that tracks your income against your expenses, showing you exactly where your money goes each month. By creating a budget, you empower yourself to make informed decisions, save more effectively, and achieve your financial goals faster.

A popular strategy is the 50/30/20 rule, which suggests allocating 50% of your after-tax income to needs (like housing and utilities), 30% to wants (like dining out and hobbies), and 20% to savings and debt repayment. Our calculator helps you see how your spending aligns with this or any other strategy you choose.

Monthly Budget Calculator

Enter your monthly income and categorized expenses to calculate your remaining budget and visualize your spending patterns.

How to Use the Budget Calculator

• Monthly Income: Start by entering your total take-home pay for the month. This is your income after all taxes and deductions have been taken out.
• Expenses: For each of your monthly expenses, add a new row. Give it a descriptive name (e.g., "Electricity Bill"), choose the most appropriate category, and enter the amount.
• Irregular Expenses: For costs that don't occur monthly (like car registration or holiday gifts), estimate the annual total, divide it by 12, and add it as a monthly expense to ensure you're saving for it.
• Calculate: Once you've listed all your income and expenses, click the "Calculate" button to see your summary.

Interpreting Your Results

The results section gives you a clear, immediate snapshot of your financial situation:

• Remaining Budget: This is the key figure. If it's positive, you have a surplus that you can allocate to savings, debt repayment, or investments. If it's negative, it means your expenses exceed your income, and it's time to review your spending.
• Expense Breakdown Chart: The doughnut chart provides a powerful visual representation of where your money is going. Large segments instantly show you which categories are consuming the biggest portion of your income. This is the perfect place to identify potential areas where you can cut back to free up more cash.