![]() Since it only has three categories, it can be tough to fit everything you spend money on each month into vague descriptions. The negative about this budgeting method is it can be very vague and might be overwhelming for the beginner budgeter. Especially since it’s so easy to remember! The 50/30/20 method has really gained popularity. ![]() Here’s a handy calculator to help figure out rough dollar amounts for each of your budget categories. That might mean cutting your saving (like for a vacation), recreation, personal spending, and miscellaneous down to bare necessities until you pay off your debt. If you’re not one of those lucky people to have no debt, you’ll have to lower as many of these categories as possible to pay off your debt quickly. This list was constructed based on the hope that all of your debt (minus your mortgage) has been paid off. You’ll notice that debt isn’t in this list. Let’s take a look at what Ramsey suggests: It really breaks down by major category, so it’s a great set of guidelines for the beginner. I feel like Dave Ramsey‘s budget percentage recommendations are some of the more in-depth out there. ![]() Dave Ramsey’s household budget percentages Now that we have that figured out, let’s take a look at some of the most popular budget techniques out there. You should give some thought as to where your money goes and what you anticipate you’ll need to be covered before really diving into your monthly budget. Or you may be putting off buying any new clothes for a no-spend challenge, so that category won’t apply to you. Remember: each of these general categories look different for every person/family.Ī family of 4 shouldn’t have the same food budget as a family of 2. Saving – travel, home improvements, retirement, college savings.Recreation – fun money, outings, vacation.Personal – salons, toiletries, grooming.Medical/health – doctor, dentist, prescriptions, vitamins.Clothing – adult/kid clothing, work clothing.Transportation – auto loan, fuel, car insurance, DMV fees, parking fees.Charitable giving – offering, charities.Food – groceries, fast food, coffee shops.Utilities – electricity, gas, internet, phone, cable.Housing – mortgage/rent, utilities, insurance, home security system, HOA dues.The examples for each main category aren’t all inclusive! Let’s break it down, looking at typical budget items. Trust me, that’ll make your life a lot easier! When you’re figuring out your percentages, you should be applying those percentages to the general budget category items. If you need help with this, check out this list of over 150 potential budget categories to narrow down your own budget, or download your free printable below. It’s important to sit down and figure out exactly what applies to you before you can start allocating a particular percentage to each of your general budget categories. Your budget is very personal and unique to you and your family. But that might not be the case for your friend or relative, who has a landline! The budget categories that are most common for everyone’s budget is housing/utilities, transportation, and food.īeyond that, there are a lot of variabilities that could affect your budget categories.įor example: do you have a home phone line? If not, there’s no reason to add that into your monthly budget categories. Having these percentages figured out ahead of time allows for more flexibility with less headache for your budget now and in the future. In that case, you know you can cut that out or lower it and add a 5-10% boost to your debt payoff. You might have allocated 10% of your monthly budget to restaurants, fast food, and coffee. In that case, it’s helpful to have your household budget percentages figured out ahead of time so you know exactly where you can fluctuate on things a little. You might lower your percentages in one category to add more to your debt payoff. ![]() Say, for example, you are shifting your main focus to paying off your debt. It can cause failure pretty quickly, in the form of over-drafting on your bank account or allocating too much to one category and not enough to another.īudget percentages are also helpful for keeping your finances in check when things take a shift in your monthly budget. They’re especially great for beginner budgeters, since the thought of mindlessly allocating money to each household budget category can be a daunting task. Budget percentages are so great for keeping your budget in check.
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