75-15-10 Budget Rule Canada 2026 - Simple Money Management
The 75-15-10 budget rule is one of the simplest budgeting methods: 75% for expenses, 15% for savings, 10% for debt. Learn how to apply this rule to Canadian salaries and biweekly paychecks.
TL;DR - 75-15-10 Budget Rule Explained
- Split after-tax income into three buckets: 75% expenses, 15% savings, 10% debt
- Simpler than 50/30/20 rule (fewer categories to track)
- Works well for Canadians with biweekly paychecks (just split each paycheck the same way)
- Example: $60,000 salary = $3,450/month after tax = $2,588 expenses + $518 savings + $345 debt
- Adjust percentages if you're debt-free or have high essential costs
What is the 75-15-10 Budget Rule?
The 75-15-10 rule is a percentage-based budgeting method that divides your after-tax income into three categories:
75% - Expenses
All living costs and discretionary spending
- Rent or mortgage
- Utilities (electricity, gas, water, internet, phone)
- Groceries and dining out
- Transportation (car payment, insurance, gas, public transit)
- Insurance (home, auto, life)
- Entertainment and subscriptions
- Clothing and personal care
15% - Savings & Investments
Building wealth and emergency fund
- RRSP contributions (retirement savings)
- TFSA contributions (tax-free savings)
- Emergency fund (aim for 3-6 months expenses)
- RESP for kids (education savings)
- FHSA (First Home Savings Account)
- Non-registered investments
10% - Debt Repayment
Paying down loans faster than minimum
- Credit card debt (extra payments beyond minimum)
- Student loans (OSAP, provincial loans)
- Car loan (extra principal payments)
- Personal loans or line of credit
- Mortgage prepayments (if allowed)
Important: Use After-Tax Income
The 75-15-10 rule applies to your take-home pay (after CPP, EI, income tax, and other deductions). If you earn $60,000 gross, your after-tax income is approximately $46,000 (varies by province).
75-15-10 Budget Examples (Canadian Salaries)
Here's how the 75-15-10 rule works with real Canadian salaries across different income levels:
| Gross Salary | After-Tax (Monthly) | 75% Expenses | 15% Savings | 10% Debt |
|---|---|---|---|---|
| $40,000 | $2,750 | $2,063 | $413 | $275 |
| $60,000 | $3,850 | $2,888 | $578 | $385 |
| $80,000 | $4,900 | $3,675 | $735 | $490 |
| $100,000 | $6,000 | $4,500 | $900 | $600 |
Note: After-tax amounts are estimates for Ontario residents. Actual take-home varies by province and personal deductions.
How to Apply 75-15-10 to Biweekly Paychecks
Most Canadians are paid biweekly (26 paychecks per year). Here's how to split each paycheck using the 75-15-10 rule:
Example: $60,000 Salary (Biweekly Pay)
Gross annual: $60,000
After-tax annual: ~$46,200 (77% take-home in Ontario)
Biweekly paycheck: $1,777 ($46,200 ÷ 26 paychecks)
Each Paycheck Breakdown:
- 75% to Expenses: $1,333 (rent, bills, groceries, gas, etc.)
- 15% to Savings: $267 (RRSP, TFSA, emergency fund)
- 10% to Debt: $178 (credit card, student loans, car loan)
When to Adjust the 75-15-10 Rule
The 75-15-10 rule is a guideline, not a strict requirement. Here's when to modify the percentages:
If You're Debt-Free: Try 75-25-0
No debt? Redirect that 10% to savings. You'll save 25% of income (15% + 10%), which is excellent for long-term wealth building. Max out your TFSA and RRSP faster.
If You Have High Debt: Try 70-10-20
Credit card debt at 19.99% APR? Prioritize payoff. Reduce expenses to 70%, keep emergency savings at 10%, and attack debt with 20%. Once debt is gone, return to 75-15-10.
If You Live in Expensive City: Try 80-15-5
Toronto/Vancouver rent eating your budget? 80% expenses might be more realistic. Just make sure you're still saving 15% and addressing debt gradually with 5%.
If You Have No Emergency Fund: Try 60-30-10
Emergency fund comes first. Temporarily cut expenses to 60%, save 30% until you have 3-6 months expenses saved, then return to 75-15-10.
75-15-10 vs. Other Budget Rules
| Budget Rule | Breakdown | Best For |
|---|---|---|
| 75-15-10 | 75% expenses, 15% savings, 10% debt | People with moderate debt who want simple tracking |
| 50/30/20 | 50% needs, 30% wants, 20% savings | People who want to separate needs vs wants |
| 80/20 | 80% spending, 20% savings | Very simple, but doesn't address debt |
| 60/20/20 | 60% needs, 20% wants, 20% savings | Aggressive savers in expensive cities |
How to Track the 75-15-10 Budget
The 75-15-10 rule only works if you actually track your spending. Here's how:
1. Calculate Your Percentages
Take your monthly after-tax income and multiply by 0.75, 0.15, and 0.10. These are your spending limits for each category.
2. Set Up Automatic Transfers
Every payday, automatically transfer 15% to savings and 10% to debt payments. What's left is your 75% for expenses.
3. Use Budget Tracking App
Waypoint automatically categorizes your transactions and shows you if you're within your 75% expense budget for the month.
4. Review Monthly
Check at the end of each month: Did you stay under 75% expenses? Did you hit 15% savings? Adjust next month if needed.
Frequently Asked Questions
Is the 75-15-10 rule good?
Yes, the 75-15-10 rule is good for Canadians with moderate debt who want a simple budgeting system. It ensures you're saving 15% (which is solid), paying down debt with 10%, while keeping expenses at 75%. It's easier to track than the 50/30/20 rule because you don't need to separate needs vs wants.
What if I can't afford to save 15%?
Start with what you can afford, even if it's 5% or 10%. The key is to start saving something and increase it as your income grows or expenses decrease. Temporarily adjust to 80-10-10 (80% expenses, 10% savings, 10% debt) until you can reach 15% savings.
Does the 10% debt payment include my mortgage?
No. Your regular mortgage payment is part of the 75% expenses category. The 10% debt payment is for extra payments above minimums on high-interest debt (credit cards, student loans, car loans). If you're mortgage-free, redirect the 10% to savings (making it 75-25-0).
Should I include RRSP contributions in the 15% savings?
Yes. The 15% savings includes all savings and investments: RRSP, TFSA, RESP, FHSA, emergency fund, and non-registered investments. If your employer matches RRSP (e.g., 5% match), that counts toward your 15% target, so you only need to contribute 10% yourself.
How does 75-15-10 work with biweekly pay?
Divide each biweekly paycheck the same way: 75% stays in checking for expenses, 15% goes to savings, 10% goes to debt. For example, a $2,000 biweekly paycheck becomes $1,500 expenses, $300 savings, $200 debt. This works perfectly with the 26-paycheck system most Canadians use.
Start Budgeting with the 75-15-10 Rule
Waypoint automatically tracks your expenses, savings, and debt payments. See if you're hitting your 75-15-10 targets every month.