take-home income

With this method, 50% of take-home income goes to needs, 30% to wants and 20% to savings, debt and investments.

The popular 50/30/20 budget, for example, suggests putting 50% of your take-home income toward needs, 30% toward wants and 20% toward savings and any debt payments.

After subtracting your committed expenses from your take-home income, you’ll have your disposable income.

Maldonado recommends aiming for a savings rate closer to 20% of your take-home income.

That guidance matches the popular 50/30/20 budget, which suggests putting 50% of your take-home income toward needs, 30% toward wants, and 20% toward savings and any debt payments.