70/20/10 Rule Calculator

Finance

This 70/20/10 rule calculator divides your monthly income into three parts: 70% for living expenses, 20% for saving and investing, and 10% for discretionary or fun spending. Enter your monthly income to see the amount for each bucket.

Formula

Living: 70% | Investing: 20% | Fun: 10%
  • Living expenses take 70% of income: housing, food, transport, bills, and other day-to-day costs.
  • Saving and investing take 20%: emergency fund, retirement, and other investments.
  • Discretionary or fun spending takes 10%: entertainment, hobbies, and treats.
  • The rule is usually applied to take-home (after-tax) income.
  • It is a flexible guideline; shift the percentages if your living costs or savings goals differ.

Example Calculation

Inputs
  • Monthly Income (PKR): 100000

On a monthly income of PKR 100,000, the 70/20/10 rule sets aside PKR 70,000 for living expenses, PKR 20,000 for investing, and PKR 10,000 for fun.

Frequently asked questions

What is the 70/20/10 budget rule?
A budgeting method that splits income into 70% for living expenses, 20% for saving and investing, and 10% for discretionary spending.
How does it differ from the 50/30/20 rule?
The 70/20/10 rule lumps most spending into a single 70% living bucket and earmarks a smaller 10% for fun, while 50/30/20 separates needs and wants more explicitly.
Should I use gross or net income?
Take-home (after-tax) income, since that reflects the money you actually have to budget with.
What belongs in the 20% bucket?
Saving and investing - emergency savings, retirement contributions, and other investments toward your goals.
Can I adjust the percentages?
Yes. The rule is a starting point. If your living costs are lower, you can move more into saving and investing.