Budgeting Guidelines

by Linda Jacob 

There is no magic budget that works for everyone.  We all have different needs and desires, so each of us will have our own categories and ideas about how we want to spend our money.  The Credit Counseling Society has come up with some guidelines that can help you determine if your budget is completely off base, or you are setting yourself up for success.

These percentages are calculated by adding up all your take home income and dividing it by total spent on each category.  For example, housing is usually our biggest monthly expense.  The Credit Counseling Society suggest to not spend more than 35% on housing.  This includes taxes, insurance, and utilities. 

If your take home pay is $3000, and you spend a total of $900 on your housing, you would divide $900 by $3000 which calculates out to 30%.  Well under the suggestion.

For transportation, 15% -20% is suggested.  This would include car payment, insurance, gas and maintenance.  Using our $3000 income from above, $450 for transportation would be 15%.  Keeping your transportation at or close to this amount would be optimal.

Keeping food at 10%-20%, including eating out is suggested.  Debt payments from 5%-15%, personal and discretionary from 5%-10%, and savings from 5%-10%.  Notice how savings is treated like a bill and is on the budget.  The rest is for medical and clothing.

Review your spending to see if you are within the guideline categories.  If not, now you have the information you need to help you decide where to make some changes.  The everyday decisions we make have a huge impact on our money, our budget and our future.  Knowing where you stand is the first step to making meaningful changes to your budget.