Spending guidelines
Keep your budget on track
It's not enough to just start a budget. By setting spending limits you should have
no problem reaching your saving goals and sticking to your budget. Here are some tips
for smarter spending:
Savings: 10% or more
It is essential to save at least 10% of your income. You should have three to six
months’ income in an emergency fund before you start saving for other goals.
(How to save smarter.)
Housing: 35% or less
Try to spend no more than 35% of your net income on housing. Depending on whether you
rent or own, that can include:
- mortgage or rent
- utilities
- insurance
- taxes
- maintenance and repairs
Transportation: 15% or less
No more than 15% of your net income should be spent on transportation. That includes:
- car payment
- auto insurance
- tag or license
- maintenance
- gasoline
- parking
Debt: 15% or less
You should spend no more than 15% of your net income on consumer debt, such as:
- student loans
- credit cards
- personal loans
- tax debts
- medical debts
For help reducing and consolidating your debt, check out our
debt reduction articles.
Other: 25% or less
Spend no more than 25% of your net income on all other
expenses. These might include:
- food
- clothing
- entertainment
- childcare
- medical expenses
- charity
- vacations
Adjust your plan
If the amount you are currently saving falls short of the
amount necessary to reach your goals, you should reevaluate your spending and savings plan.
This should also be done annually or whenever there is a large change in your financial
goals and needs. By tailoring and adjusting your spending plan to fit your life, you
can reach your goals and sleep a little better at night.
If you're new to budgeting, download our Acrobat
budget sheet and get started today.