budget calculator
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You can use the budget calculator to get a sense of the types of expenses you have. Keeping close tabs on your monthly budget can help you take control of your spending and see where you can cut costs or find extra cash to put aside for savings.
- What is a budget?
- How to use Credit Karma’s budget calculator
- Tips for budgeting
- FAQs about budgeting
What is a budget?
A budget is a plan for how you’ll spend and save the money you earn. Sticking to a budget can be a good way to keep your spending under control as you work toward meeting big-picture goals, like paying off debt or saving for a major purchase.
Using our calculator, you’ll be able to get a clear picture of what you’re spending across different categories. You’ll also get a closer look at …
- Your estimated monthly income after expenses
- Total monthly expenses
- Annual net income
- Annual income after expenses
This can help you decide where there might be room for improvement. For example, you might see that cutting back on your monthly take-out food or salon appointments could leave some extra cash to put toward your credit card debt or to stash away as savings.
How to use Credit Karma’s budget calculator
Our budget calculator can help you draft an estimated monthly budget based on the information you enter about your income and expenses.
Before entering your information into the budget calculator, it’s a good idea to make sure you have a list of all your bills and a copy of your most recent paycheck so that you can enter the most up-to-date numbers for your income and expenses. If anything changes, you can re-enter your information as many times as you need to.
Let’s take a closer look at what’s needed to start reviewing your budget using our budget calculator.
Income
Start by entering your total income. Any side hustles or supplementary sources of income should also be included. There are several parts to this, including …
- Gross annual income — This is your annual income before taxes.
- Effective tax rate — Also called “average tax rate,” this is the share of income you pay in taxes.
- Estimated net income — This is what you earn after taxes are taken out of your paycheck each month.
Savings and investments
Enter the amount you plan to devote to savings each month for emergencies as well as for goals like saving for a car or home. Here, you can also add how much you plan to budget for investments. But keep in mind that the calculator will not tell you what you can expect to earn from any investments. It may be tempting to skip over savings, but setting aside money for savings every month can help ensure you don’t have to turn to credit cards or personal loans.
Debt and loan repayment
Plug in monthly payments that you put toward paying off debt. This could include …
- Student loans
- Auto loans
- Credit cards
- Personal loans
Living expenses
Next, add in your monthly living expenses. These include anything you spend on what you consider necessities, such as …
- Rent or mortgage — The amount you pay for housing each month.
- Utilities — The cost to cover electricity, water, heating and cooling, etc.
- Property tax — The amount of money you put toward paying property taxes on a home you own. Don’t include this if you pay these taxes as part of your monthly mortgage payment.
- Groceries — How much you spend each month on food you’ll prepare at home.
- Home insurance — The monthly amount you pay toward home insurance. Don’t include this if you pay your premium as part of your mortgage payment.
- Health insurance — The amount you spend on insurance monthly. Don’t include this if the amount is already deducted from your paycheck.
- Out-of-pocket medical expenses — This includes co-pays, office visits and other monthly medical costs.
- Internet and phone plans — The amount you pay each month for these services.
- Gas — How much you pay at the pump each month for fuel.
- Car insurance — The amount you pay toward auto coverage.
- Parking — The amount you pay for parking each month.
- Public transportation — How much you spend on public transit each month.
- Car maintenance and repairs — This is the amount you spend on fixing and maintaining your vehicle. Since this isn’t necessarily something you need to do each month, enter your total yearly cost in this field.
Entertainment and travel
Enter how much you pay for these discretionary expenses, which can include …
- Meals out — This can include dining at restaurants, take-out and delivery.
- Event tickets and admission fees — This is the amount you spend each month on entertainment, including concerts, museums and movies.
- Travel – Use this to account for your yearly vacation and travel expenses.
- Cable, satellite and other TV services — The amount you spend to get access to television shows and movies at home and on your devices.
Other expenses
In this budget category, you’ll find expenses for apparel and personal services that can be either necessary or discretionary, such as …
- Clothing — This is how much you spend on clothes each month.
- Beauty, hair and other services — The discretionary cash you spend on beauty products and services.
- Gym and fitness memberships — Your monthly gym and fitness center costs.
Tips for budgeting
Creating your budget is a great first step to staying on top of your finances. To help you stick to your plan, here are a few best practices to consider.
- Set up money dates. Whether you’re budgeting solo or with a partner, consider setting up a budget recap meeting on a monthly basis and track spending daily to see if you’re sticking to your budget. This way, if you notice you’re overspending in one area, you have time to adjust spending in another category to help balance things out.
- Consider the 50/30/20 budget rule. If you’re unsure how to allocate your money, start by taking a look at the 50/30/20 budgeting method. The rule divides your expenses into three main categories: 50% on necessities; 30% on things you want but don’t need; and 20% on long-term financial plans, such as paying off debt and saving money.
- Start saving, even in small amounts. It’s recommended to have three to six months of expenses in an emergency fund. While this may be a good rule of thumb, it might not be a goal you can meet right away. Instead, you could start with a smaller savings goal, like $500, and work your way from there. Small amounts can add up over time, and your motivation to save may grow as you see your savings account balance grow.
- Reduce your debt. Paying down consumer debt can eliminate payments and free up money that you can put toward other areas of your budget. Credit cards can be a great financial tool but make sure you’re only spending what you can afford to pay off every month. Credit cards often come with high interest rates that can add up over time and take money away from other areas of your budget. Reducing your debt can also help your credit score, which can get you lower interest rates in the future.
FAQs about budgeting
Saving money isn’t always easy — and if your budget is already stretched, setting aside more money can feel much harder. Start by creating a budget and tracking each of your expenses. Having a good idea of where every single dollar goes can help you see if there are any expenses you can cut. And the tips in this article — even something small, like using reusable cleaning products — can help you make marginal gains on any additional savings.
It’s recommended to have three to six months’ worth of living expenses in an emergency fund. But the exact amount you need may differ depending on things like your profession, lifestyle and any resources you have.
The 50/30/20 budgeting rule is a general guideline for budgeting. It involves saving 20% of your income, spending 50% of your income on necessities and spending the remaining 30% of your income on wants. This is a guideline and can be customized to best meet your needs.