![]() The chart is based on take-home (net) pay. A rockstar probably wouldn't save any money. Therefore if you save 15% of your gross income towards your 401(k) and another 10% of your take-home pay towards general savings, then you are a rockstar. In addition, this also excludes your 401(k) savings which usually is taken out of your income prior to it being considered "take-home" pay. What one category do you scrimp on so that you can spend more on another?Īnd if you are a tither, then this budget is based your income after your tithe. Leave a comment on the blog in regards to your favorite trade-out. I encourage you to compare your household expenditures to this chart and this philosophy. Many financial households operate on 110% of their income. People who fail to operate on this "give and take" basis often find themselves in debt. If you spend more in this category, make sure your budget balances by spending less elsewhere. The remaining 734 each month covers utilities, household expenses. Money spent on entertainment, recreation, education, tobacco & alcohol, eating out, gaming, hair cuts, hobbies, and planned charitable giving are some examples. That includes rent or mortgage payments, mortgage interest, property taxes, maintenance, repairs and insurance. ![]() Shelter accounts for 1,050 of our monthly budget. In addition, I don't spend much on entertainment, therefore my allocation towards savings is above 10%. household spends 21,409 per year, or 1,784 per month, on all things related to housing. Insurance (including health, medical, auto, and life): 10. Here is one example of budget percentages: Housing: 25. I have very low transportation cost, therefore dining out and housing receive a higher allocation of my income. With that said, a good general rule of thumb is to limit your mortgage or rent to 25 of your net income and keep all other categories between 5-15. That is exactly how I live the financial life that I want to live. In other words, let's say that your household transportation costs are only 5% of your income, then you can feel comfortable to split the "extra" 10% towards other categories. ![]() If you don't spend the maximum amount in one category, then you can allocate more money to another category. Below you will find the ideal household budget.īut here is what you need to know. So here is the definitive answer in writing. If you’d like to learn more about 50/30/20 budgeting, we have a post that explains it. It’s where you spend 50 of your income on your needs, 30 of your needs on wants, and 20 gets saved / invested. The most common question that I get on a daily basis is this: How much money should I be spending on _? If the Dave Ramsey budget categories are a bit too complicated or restrictive, you could use the 50/30/20 rule.
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