Budget Percentages
Remember, managing your money flow is no different than anything else in life. You don’t have to be good to start, you just have to start to be good. Review the following percentage allotments provided from other sources to get an idea of what might be right for you as you create your own personal budget.
The Consumer Credit Counseling Service provides the following percentages as a suggestion for household budgets.
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Housing
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20-30%
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Utilities
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4-7%
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Food
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15-20%
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Transportation
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6-20%
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Medical
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2-8%
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Clothing
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2-4%
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Invest/Savings
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5-10%
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Debt Payments
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15-20%
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Misc.
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5-10%
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The National Federation for Consumer Credit has posted these percentages to consider when creating a household budget
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Housing
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24%
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Food
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14%
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Health
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6%
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Clothing
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6%
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Transportation
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17%
|
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Entertainment
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5%
|
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Personal Insurance
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11%
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Charity
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4%
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Savings and Other
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13%
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One more example from the good folks at personalfinancebudgeting.com.
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Savings
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5%
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Food
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18%
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Transportation
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12%
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Clothing
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9%
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Medical
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6%
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Recreation
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5%
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Housing (including utilities, furniture, and operating expenses)
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27%
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Other
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18%
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No matter how you decide to set up your budget, here are a few suggestions money managers commonly advise.
- Put at least 10% into your savings category if at all possible. 5% bare minimum, but make sure something is put in savings every month.
- Put as much towards debt reduction as possible. See our Debt Elimination article for more details.
- Keep housing costs, mortgage or rent to no more than 25% if possible. This may require a move but if you’re serious about creating extra cash, this is one suggestion that most money managers put out as a top-of-the-list idea.
- Your savings is to be used only for predetermined spending and emergencies. (And for the record, a spontaneously thought up getaway is not an emergency.)