40 Over saving and budgeting calculator

The 40 Over calculator

£

After tax, NI, student loan and other deductions.

£

Yours and employers’ combined.

Adults in the household

Save from take-home

£0

Fun

£0

15% of your total income

Essentials limit

£0

Spend less if you can

Save Fun Essentials limit

40 Over is a budgeting rule we built at Financial Interest as an alternative to older frameworks like 50/30/20.

These rules typically tell you how much you should be putting aside for needs, wants and savings in fixed percentages. Our 40 Over saving and budgeting rule does the opposite: rather than deciding what your life ought to cost, it sets a sensible floor, asks you to save 40% above that, sets aside 15% for fun, and leaves the rest for your essentials.

That means you’re saving an amount that actually makes sense for what you’re taking home – if you’re earning less, your savings target is lower; if you’re earning more, it’s higher.

The threshold over which 40% is saved is the State Pension: £12,548 a year, or £1,046 a month, per adult. It’s roughly what one person needs to cover the basics, so nobody is asked to save anything until they’re earning above it. Your pension contributions count towards the 40%, so a lot of people are already partway there.

Read our full analysis and methodology for devising 40 Over here.

How 40 Over works

  1. Work out your total income. Your household’s yearly take-home pay after tax, National Insurance, student loans and other deductions, plus everything going into your pension – yours and your employer’s contributions.
  2. Your savings target. Take £12,548 off your total income for each adult in the household, then save 40% of what’s left. Your pension contributions count towards this, too.
  3. Your fun budget. 15% of your total income.
  4. Your essentials limit. Whatever’s left of your total income once those two are accounted for.*
  5. Divide everything by 12 for your monthly figures.

*For high earners, ensure your essentials limit is no more than three State Pensions (£37,644) per adult, plus 20% of your total income above that, per year. Split anything over that figure between saving and fun.