![]() To figure out what these percentages would be in your household, take the budget percentages from the chart above and multiply them against your monthly household take-home pay:Įxample: 33% x $6,000 take home pay = $1,980 Be wise with your budget Eating out and not planning meals can add up quickly. Foodġ3% of the average household budget is spent on food, which can be further broken down into $4,049 of food at home and $3,154 on food away from home.Ī quick way to decrease these expenditures is to find more opportunities to cook at home and to bring your lunch to work. While we were paying off debt, we actually sold one of our cars and I started riding my bike to work on a semi-regular basis to dramatically cut these costs. This includes finance interest charges, gas, repairs, maintenance, public transit fees, etc. Transportation costs are the next highest category coming in at $754 per month or $9,049 per year. This is the main reason why we decided to move into an RV for 9 months. Department of Housing and Urban Development recommends keeping housing costs below 30% to avoid feeling cost burdened by their residence. Their data is based on an annual average of $57,311 worth of expenses.Īs you can see, 33% of an average family’s expenditures are spent on housing. The Bureau of Labor Statistics recently did a survey of American households and figured out how most people spend their money. Most common budget percentagesĪnother way to determine the best budget percentages is to figure out what other people are already doing. That’s perfectly fine, just continue adjusting as you go. You may spend too much in one category and too little in the next. ![]() Once that’s done, spend the next 3 months tracking all of your expenses and figure out if the amounts you’ve set make sense. Figure out what you’ve been spending money on and then adjust those amounts to something reasonable for your budget. One way to determine your budget percentages is to look into your bank accounts and credit cards and calculate an average for all of your spending. ![]() Our post called, “How to create a monthly budget in less than 20 minutes” will guide you through the process and provide you with a FREE budgeting spreadsheet to make things easier. If not, stop what you’re doing and create a budget right now. Create a monthly budgetīy this point, you should already have your monthly budget in place. These budget percentages are just suggestions though, you’ll have to determine what works for you and what doesn’t. You don’t have to do that though because we want to give you some quick tips to get you started. We had the same problem when we started but we figured it out through trial and error. Unfortunately, when you’re new to budgeting, you may not know how to determine budget percentages that will make sense for your financial situation. Creating a budget should be one of the first steps you take when you’re working towards financial freedom.
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