60/20/20 Rule Calculator

Calculate 60/20/20 Rule



Formula

To calculate the 60/20/20 Rule (B):

\[ B = I \times RR \]

Where:

What is the 60/20/20 Rule?

The 60/20/20 Rule is a budgeting guideline that suggests allocating 60% of your income to essential expenses, 20% to financial goals (like savings or debt repayment), and 20% to discretionary spending. This rule helps individuals manage their finances effectively by ensuring a balanced distribution of income.

Example Calculation

Let's assume the following values:

Using the formula:

\[ B = 50000 \times 0.60 = 30000 \text{ dollars} \]

The amount allocated for essential expenses is $30,000.