#Us household budget percentages how to#

This includes all those services that you have to pay for in your life, so would cover electricity, water, gas, trash services, internet and your phone plan. It includes concerts, trips to the cinema, gym memberships, club fees and so on. It’s fine to make sure you’re having some fun while working on your finances, so this budget category is for those things. Of course, this may fluctuate depending on what happens to your household in a particular month, but it’s always a good idea to set some money aside for the unexpected. This is for all health costs except your health insurance. Whether you choose to give to charity or through your preferred religious community, allocating some money to this category can be a great reminder of what you do have, even as you may be dealing with some of your own money issues Health It’s a good idea to assign some of your budget towards helping others, if you can. Don’t be fooled by the name though – it doesn’t only cover your savings but also things like paying off debt and contributing to retirement funds.

You should be allocating money to your financial goals every month, so this is the budget category for that.

#Us household budget percentages how to#

You’ll also join our mailing list to get updates on how to manage your money – unsubscribe at any time at the end of each email. This includes all public transport costs as well as expenses involved in owning a car except for insurance, such as maintenance, gas, parking and vehicle registration.

TransportationĪll expenses relating to how you get from A to B will fall under this category. This category covers all insurance premiums you owe, including health insurance, auto insurance, homeowner’s or renter’s insurance, life insurance and so on FoodĪny costs relating to what you eat should go here, meaning that it includes both grocery expenses and the cost of eating out. This includes your rent or mortgage repayments, related taxes, maintenance fees and homeowners association costs Insurance So this is why basing your budget on these broad household budget categories can be a good place to start: Housing You probably have a ton of different expenses in your daily life and simply having that list above may make it hard to see just how to divide your spending up between each of those categories.įor example, if you like to eat out from time to time, should this count as food spending or fun spending? What do the household budget categories consist of? As long as they’re put somewhere so your spending of every dollar is accounted for, that’s the most important part.Īnd one final point: don’t forget that these percentages are based on your after-tax income. If, however, you want to keep getting take out a few nights each week and allocating 10% to 15% of your budget on food isn’t going to be enough to cover that, you should really reconsider your spending habits.Īnd if you’re still not sure what household expenses to include in what category, it’s not the end of the world. For example, if you want to plough more than 10% of your income into your savings, then that’s great! Just make sure though that any adjustments that you make are in line with your financial goals. So if you need to adjust them slightly to suit your personal circumstances, that should be fine. It’s important to remember that these are only recommended household budget percentages. This lets you keep track of exactly where every cent that comes into your account is going out.Īnd the percentages themselves are as follows: They follow the concept of the zero-based budgeting method, which involves making sure that every dollar has a job. These recommended household budget percentages are from a list that was originally created by Dave Ramsey. What are the recommended household budget percentages?

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