Budget Percentages

[SavingSweetOneL]

Hi All,

If you do your budget by percentages...what percentages do you use for your expenses?

Thanks.

SweetOneL

[kork13]

In general, I follow the guideline of 50% needs, 30% savings, 20% wants -- I know that savings/wants are "backward" from what others use, but I do this to save more aggressively while I'm still in my younger years.

More specifically, this is the actual breakout that I am currently using for my month-to-month cash-flow planning:
Taxes/Medicare/SS: 12%
Tithing & Charity: 13%
Housing: 20%
Utilities: 5%
Debt payments: 10%
Auto & Insurance: 3%
Grocery/Household: 5%
Savings: 27%
Miscellaneous/Entertainment: 5%

It's meaningful to note that while I do monitor my monthly spending against these values, I don't view them as hard limits... I see them more as "the plan" for how I spend my money each month, so if (when) my actual spending varies from these values, I simply take note of it and make adjustments to either my plan or my spending as necessary.

As others will likely discuss, so long as I'm saving what I want to save and my needs are being met, I don't stress about the specifics of how the rest is spent.

btw, I base everything on gross income...some use net income ("take-home pay"), but I find that term terribly imprecise.

[MonkeyMama]

We are very similar to kork. With the 50/30/20 plan, we always felt the 30/20 should be switched. On the flip side, individual variables will vary widely based on circumstances. I support a family of 4 in a high-cost area and we have no subsidized health insurance. BUT, a much higher percentage of our income went to mortgage (or rent) when we were younger, made less, and had double the mortgage interest rate. But we are used to scrimping in other areas due to higher housing costs in our 20s, and use that to our advantage to keep a 30% savings rate. (The biggies for us are to keep debt down to -0-, and to not spend a lot of money on vehicles. We also are in an extremely low tax bracket, which helps immensely).

Taxes/Medicare/SS: 12%
Health Insurance: 12%
Mortgage + HOA: 14%
Property Taxes: 5%
Insurance (home, disability, life): 3%
Vacation: 2%
Dental (no insurance): 2%
Vehicle Maintenance (2 vehicles): 2%
Utilities: 5%
Debt payments: -0-
Auto (Fuel only): 4%
Grocery/Household: 7%
Savings: 27%
Miscellaneous: 5%

This is just based on my salary. We usually have a decent amount of other incomes sources, which goes to savings and extras. This year, for example, we did several large purchases without touching our savings accounts.

We generally make savings goals the priority, and then live on the rest. Like kork, how we spend the rest doesn't really matter. We do make an effort to avoid debt and contracts, to keep things flexible. But other than that, I am not overly concerned about what % we spend on any one category.

[snafu]

Kork's nailed it! I check quarterly to keep measurable parameters so that I can adjust if something goes off the rails or the economy falls off the cliff.