Here’s a budgeting calculator that will help you figure out how much of your after-tax income you need to put aside for essential necessities, discretionary spending and savings. A budgeting calculator is a great way to get a quick overview of your financial situation. The calculator estimates how much you could save by making different changes to your spending. We have three types of savers listed where most people would fit into a ‘Skint’, ‘Average’ or ‘Splurger’ buckets. These have been split into these three categories for sake of simplicity.

What are necessities?

Necessities are costs for essential needs for housing, such as rent or mortgage payments, food, water, utilities, transportation or vehicle costs, debt payments, as well as insurance payments.

What is the difference between discretionary and disposable income?

The difference between discretionary and disposable income is that discretionary income is income that the consumer has left after they have paid off their necessities. On the other hand, discretionary income is the amount of money that a consumer has left over after they have made their obligatory payments.

What is discretionary spending?

Discretionary spending are non-essential costs such as for leisure travel, restaurants, entertainment, or costs related to socializing.

  • Skint – These savers will spend a greater proportion of their overall spend on saving or investing, and less on necessities or discretionary spend.
  • Average – Average savers will put aside at least half their earnings for necessities, a third into discretionary spend and the remaining portion into savings or retirement accounts.
  • Splurger – If you’re a Splurger, then you’re more likely to spend a majority of your income on necessities or discretionary spending, and put away a minimum amount into savings or retirement.

What are the easiest ways of saving money?

You can save more money by considering some of the following strategies:

  • Paying off high interest loans or credit cards.
  • Buying used items. Buy used items at a lower price.
  • Buying items, such as food, in bulk.
  • Borrowing items from friends or family when possible.
  • Using low or or zero interest loans or credit cards.
  • Cutting back on expensive subscriptions such as cell phone plans.