Budgeting Tools That Calculate Based on Income

Figure how much you should be spending based on what you earn.

Figure how much you should be spending based on what you earn.

You have two ways you can budget. You can start with your expense and see how much you need to earn or you could start with how much you earn and adjust your expenses. If your income is pretty much set, you need budgeting tools that can work from your income and show you how to cut expenses so that you live within your means.

Spending Percentages

On calculators like the ones available through the websites Skills Toolbox.com and Free-Online-Calculator-Use.com, you enter only your monthly income. By pressing "submit," you will see what you should be spending in various categories such as food, clothing, rent, groceries and transportation. The Budgeting Percentages Average Calculator, for example, allocates money to each category based on the Consumer Expenditure Survey from the U.S. Bureau of Labor Statistics. You can see what your expenses should be according to your income.

Custom Calculators

You can find calculators that will establish a spending plan for single people, families, businesses, holidays and irregular bills, to give a few examples. Your expenses will look slightly different with each calculator because they make different assumptions about how you should be spending your money. You can compare this to your present situation and readily see what adjustments you need to make.

Paying Taxes as You Go

If you want to see how much tax you pay on a monthly basis along with your other expenses, calculators such as the one at the website Crown show you what your monthly withholding should be. This calculator also shows you what percentages it is using for each expense category. Knowing these percentages could be useful for your financial planning. For example, the calculator suggests you spend 33 percent of your income on housing.

Your Unique Situation

All these calculators use general guidelines and percentages. You can make specific adjustments based on your financial condition. For example, if you have high debt, you may want to cut back in areas such as gifts and clothing and entertainment so you can set aside more money to service that debt. If you use public transportation, your commuting expenses may be much lower than the calculators allow for. You could apply the difference to upgrading your housing. The Personal Budget Calculator from Free-Online-Calculator-Use.com allows you to adjust your expense categories based on your actual living situation and shows you what percentage of your income you are spending on each category.

About the Author

Kevin Johnston writes for Ameriprise Financial, the Rutgers University MBA Program and Evan Carmichael. He has written about business, marketing, finance, sales and investing for publications such as "The New York Daily News," "Business Age" and "Nation's Business." He is an instructional designer with credits for companies such as ADP, Standard and Poor's and Bank of America.

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