Five percent of your budget should be set aside to reduce the amount of money you owe. Most of us have debt that we are trying to pay off. Many people, however, feel that thirty-five percent is a much more reasonable goal. Ideally, twenty-five percent of your income should go in this category.

Housing, whether for rent or mortgage payments, is going to take up the largest percentage of your income.

Ten percent of your original budget is considered a fair percentage. By setting aside a percentage of your income for these things, you are able to know you have met your wish yet at the same time not spent money you need for other areas. Giving and tithing are important things to many people. Use these numbers as a base guideline and tweak to fit your personal situation. The couple may need to spend more on insurance or may be able to put a higher percentage in savings. For example, a single mother of three kids is likely to spend a higher percentage of her income on rent and food than a couple who both work and have no kids. Your individual situation will determine your priorities, which will vary from the next person’s priorities. The following percentages are based on the average spending rate of people. When looking at the following percentages, you may think that one or two categories don’t apply to you or that there is something else you need to have included. When following these rules of thumb, it is less likely that your budget will be derailed by allocating too much for one expense and not enough for another. These were determined over time to reflect what a person can reasonably expect to pay for certain things. Household budget percentages refer to the portion of your monthly income that is set aside for each expense covered by your budget. What Do We Mean by ‘Household Budget Percentages’? Knowing how much money to allocate for certain expenses can be confusing if you have never had a budget in the past. By taking charge of how and where to spend your money, you enable yourself to control your money, rather than your money controlling you. What are the Most Common Household Budget Percentages?įollowing a budget is like a combination of a financial roadmap and peace of mind.

Sample budget california single person