How this calculator works
The 70/20/10 rule divides take-home pay into three broad buckets: 70% for essentials, 20% for savings and debt repayment, and 10% for lifestyle spending. It is a cousin of the 50/30/20 rule that gives housing, food, transport and other unavoidable costs a larger share, which suits households in high-cost cities or on a single income. Essentials include rent or mortgage, utilities, groceries, insurance, childcare, transport to work and minimum debt payments. The savings bucket covers emergency savings, retirement contributions and extra debt payments. Lifestyle covers everything optional. The percentages are targets for an average month, not a strict accounting rule. Because the same field is used for whichever amount you choose, the calculator shows the income implied by that amount and then the three targets. Amounts can be entered per month or per year; the results are shown in both.
Formula
Monthly income = amount / share, where share is 0.70 for essentials, 0.20 for savings or 0.10 for lifestyle, after converting an annual amount to a monthly one. Essentials = 0.70 x income; savings and debt = 0.20 x income; lifestyle = 0.10 x income. Annual figures are twelve times the monthly figures. The three shares add to 1.
Worked example
On $4,000 a month, essentials are $2,800, savings and debt are $800 and lifestyle is $400. If essentials actually cost $3,500 a month, the implied income is $3,500 / 0.70 = $5,000, which gives $1,000 for savings and $500 for lifestyle. An annual lifestyle budget of $6,000 works out to $500 a month, implying a monthly income of $5,000.
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Frequently asked questions
How is this different from 50/30/20?
The essentials share is larger and the lifestyle share is smaller. The 70/20/10 split suits a household where housing, childcare or transport take a big fixed bite, at the cost of less discretionary room.
Is 10% enough for lifestyle?
It is a deliberately tight allowance. If 10% does not cover the things you value, the honest response is to raise the lifestyle share and lower another bucket, rather than to let lifestyle overspend quietly each month.
Do pension contributions count as savings?
Yes. Money deducted at source into a workplace pension or retirement account is savings, even though it never reaches your bank account. If your income figure is already net of that deduction, count the contribution as part of the 20% rather than trying to save it twice.
What about a bonus or tax refund?
Treat irregular money separately. A common approach is to direct most of it to savings or debt, since the monthly plan does not depend on it.