Budget breakdown tips
Quick answer: Keep both your housing and food costs under a third of your take-home pay to have enough money left over for other common expenses and saving.
Here is a category break down to help you keep to your spending plan:
- Housing (rent or mortgage) 20% to 35%.
- Utilities (gas, electric, water, trash, telephone) 4% to 7 %.
- Food (at home and away) 15% to 30%.
- Family necessities (laundry, toiletries, hair care) 2% to 4%.
- Medical (insurance, prescriptions, bills) 2% to 8%.
- Clothing 3% to 10%.
- Transportation (car payment, gas, insurance, repairs, or bus fare) 6% to 30%.
- Entertainment 2% to 6%.
- Savings 10% to 15%
Here are a few more tips and ways to approach different aspects of your personal finances:
- Try to limit your installment debts (car loans, credit card bills, other loans) to 10 to 20% of your monthly budget.
- Review your bank and credit card statements. It will remind you where your money is going.
- Try to spread out bills evenly over the month. Avoid having one week when all of your cash-on-hand is needed for bills.
- For large expenses that are not monthly (for example: insurance bills, car repairs, holiday gifts,) set money aside each week or pay period so that you have money to pay for these expenses.