How the Simple Budget Planner calculates your monthly budget

A “simple budget” is basically one question: Where did the money go? This calculator turns that question into clear numbers by using just three steps: (1) add up your monthly income, (2) add up your monthly expenses, and (3) compare them. The output is your leftover money (or deficit) and a savings rate percentage.

The reason this works is because budgeting doesn’t need to be complicated to be useful. Even an imperfect first draft (based on realistic estimates) gives you something powerful: a baseline. Once you see the baseline, you can improve it by adjusting a few categories, removing leaks (subscriptions you forgot about), or setting a savings goal.

The calculator uses monthly take-home income—what you actually receive after tax and deductions. If you’re paid bi-weekly, you can still use a monthly number: multiply a typical paycheck by 2 for a rough month, or by 26 and divide by 12 for a more accurate monthly estimate. If you earn extra money (side gigs, bonuses averaged monthly), add it to “Other monthly income.”

Expenses are grouped into everyday categories: housing, utilities, groceries, transport, insurance, debt, subscriptions, eating out/fun, and “other.” If a cost is not monthly (for example, car insurance paid every 6 months), convert it to monthly by dividing the total by the number of months it covers. Example: $600 every 6 months ≈ $100/month.

After income and expenses are summed, the calculator finds your leftover money: Leftover = Total Income − Total Expenses. If leftover is positive, that’s money you can save, invest, or allocate to goals. If leftover is negative, it means the month is likely running on credit cards, loans, or reducing savings. The savings rate is computed as: Savings Rate (%) = (Leftover ÷ Total Income) × 100.

The bar in the result box provides an easy visual breakdown: we treat essentials like housing, utilities, groceries, transport, insurance, and debt as “needs,” and we treat eating out, subscriptions, and other as “wants.” Your leftover is treated as “savings.” This is not perfect for every lifestyle, but it’s a fast signal. If the “needs” portion is extremely high, you may need either higher income or a housing/transport adjustment. If “wants” is high, your fastest win is usually trimming recurring spending.

Some budgets fail because they become too complex to maintain. This one is designed to be used repeatedly: try it once with your best guess, then re-run it after you review your last month’s spending. Over time, you’ll create a realistic picture of your month—without needing a spreadsheet or an app subscription. For many people, the biggest breakthroughs come from small adjustments repeated consistently.

Budget formulas (with real examples)

• Total Income = income + other income
• Total Expenses = sum of all expense categories
• Leftover = total income − total expenses
• Savings Rate (%) = (leftover ÷ total income) × 100
• Goal Gap = savings goal − leftover (only if goal > leftover)

Suppose your take-home income is $4,500 and other income is $250. Total income = $4,750. Your expenses: housing $1,600, utilities $220, groceries $420, transport $180, insurance $260, debt $300, subscriptions $55, eating out $120, other $90. Total expenses = $3,245. Leftover = $4,750 − $3,245 = $1,505. Savings rate = 1,505 ÷ 4,750 ≈ 31.7%. That’s a strong savings rate for most households.

Income is $3,200. Expenses: housing $1,650, utilities $260, groceries $520, transport $260, insurance $250, debt $350, subscriptions $120, eating out $320, other $180. Total expenses = $3,910. Leftover = $3,200 − $3,910 = −$710. This usually means debt is growing or savings is shrinking. The fix is not “try harder”— it’s math: reduce expenses, increase income, or both. Start by hunting recurring costs and one large category (usually housing or transport).

If your leftover is $350 and your savings goal is $500, the gap is $150. That means you need either $150 more income, or $150 less spending, or a mix (for example: cut $50 subscriptions + reduce eating out by $100).

• Run it with friends and compare savings rates (friendly competition).
• Screenshot the result and share the savings-rate badge in group chats.
• Try “budget challenge” scenarios: cut subscriptions to $0 and re-calc.
• Use it monthly: “What changed since last month?” is where wins appear.

How to use this budget planner effectively (without burning out)

The best budget is the one you can repeat. Here’s a simple routine that works for most people: First, run the calculator with your best estimate. Second, compare it with reality by looking at the last 30 days of transactions (bank + credit card). Third, update only the categories that were off. Don’t aim for perfection—aim for directionally correct.

• Start with housing: It’s often the biggest category, so small changes matter.
• Convert yearly bills: Insurance, memberships, and fees should be averaged monthly.
• Track “subscription creep”: It’s common to underestimate recurring charges.
• Use a buffer: Put 2–5% of income into “other” until you learn your true patterns.
• Pick one focus: If you cut 10 things at once, you won’t sustain it. Pick one.
• Automate savings: If leftover is positive, schedule an automatic transfer first.

You don’t have to follow a strict system, but frameworks help: 50/30/20 suggests ~50% needs, ~30% wants, ~20% savings. Zero-based means assigning every dollar a job (including fun money). Pay-yourself-first means saving first, then spending what remains. This calculator supports all of them because it starts with the same core truth: income minus expenses determines what’s possible.

Frequently Asked Questions

• Should I use pre-tax or after-tax income?

  Use after-tax (take-home pay). Budgeting works best when the income number matches what you actually can spend.

• What if my income changes every month?

  Use an average. If income is seasonal, try a “low month” version and a “high month” version, then plan using the lower number to stay safe.

• Why is my leftover negative even though I feel fine?

  Often, that means you’re covering gaps through credit cards, delayed bills, or reducing savings. The calculator is designed to show the “math truth” so you can fix it early.

• Is the savings rate the same as investing rate?

  Not necessarily. Savings rate here means “money left after expenses.” You can allocate it to emergency funds, investments, debt payoff, or future purchases.

• Does this store my budget online?

  No. Your numbers stay in your browser. If you use “Save Plan,” it stores locally on your device using localStorage.