Budget percentages

Author: Ashley

7 Jan

I’ve never really sat down and broken down my bills into percentages. Personally, I never really saw the point. If you have a budget that is working for you then who cares. The guidelines are nice, but at the end of the day your budget needs to work for you. You will be forever frustrated if you try to fit your life into a box someone else made. But, if you are in the process of making a budget for the first time, or reworking a budget that doesn’t fit, then it’s a great place to start. But I was curious how I compared to others and to the suggested percentages. Here are the recommended percentages according the experts. The percentages are of our net income.

So here it goes…

Mortgage: 24%
Household bills: 12%
Transportation: 25%
Savings: 5%
Credit card: 5%
Medical: 1%
Spending: 15%
Groceries: 11%

Household bills consists of the HOA dues, cable/internet/ phone, electric, cell phone, and the city.

Savings consists of retirement and e-fund savings. It doesn’t consist of extra money paid to mortgage. If I put that into the savings category it changes savings to 7% and mortgage to 22%.

Transportation consists of car payments (15%), insurance (3%), and gas (7%).

Credit card balance is from landscaping the backyard and is at zero percent interest.

Medical consists of one copay a month and the copays for our monthly medications. It does not take premiums into account.

I’m curious to know what your budget percentages look like. Especially your transportation costs. Cause Dang! 25% is a lot. So I’m curious to know how it compares to yours. I will say that it’s my number one financial goal right now to get the cars paid off and never have another car payment again. That would bring down the transportation costs to 10% and up the savings to 20%. Which would be awesome! Of course a big chunk of that savings would go to buy a car… so call it what you will.

Pic by: Jeff Keen

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Filed under: Budget

15 Responses for "Budget percentages"

Lynn January 7th, 2009 at 11:14 am 1
I’ve never broken down my budget by percentages and its actually going to be scary. Since you did the percentages by net income, how do you take into account 401K and medical contributions if they are pre-tax? Also, does your mortgage % include real estate taxes? Also, what is included in your spending category? Money spent other than groceries?
Ashley January 7th, 2009 at 11:34 am 2
Lynn: Thanks for your comment… good questions. Let’s see… My husband doesn’t have a 401(k) at his job so we don’t contribute to one. Medical contributions I left out, I know that makes it less accurate but then I would have had to deal with taxes and tax returns and everything… I thought this would just be simpler.

The mortgage % does include taxes and insurance.

The spending category is just what you said… all spending that isn’t bills or groceries. Eating out, clothes, stuff for the kids, ect. I also count paper products like paper towels and cleaning products as groceries.
LAL January 7th, 2009 at 11:54 am 3
Transportation is probably 5%. We have 2 older cars, spend $150/month on gas, make around $10k, insurance is $100/month now for 2 cars/2 drivers and setting aside $250/month repairs or tires, etc. Where do you put your car repars?

2.5% for the stuff you listed like payments, gas, insurance.
Annie Jones January 7th, 2009 at 12:19 pm 4
I’m sad to say that with our van payment, as well as gasoline, oil and filters, insurance, property taxes and a small maintenance/repair budget for two vehicles, our transportation percentage is 31%. It’s more than our mortgage/insurance/taxes, which are 26%.

The good news is that our groceries (food only) and meals out percentage is just 9%. And since we are counting the van payment in the transportation category, our debt percentage is 0%!
Ashley January 7th, 2009 at 2:32 pm 5
LAL: We don’t set aside a set amount for car repairs/ maintenance. Small stuff like oil changes or even tires would be in the spending category. Major car repairs would have to come out of savings. Luckily *knock wood* we have avoided that for the most part.
J. Money January 7th, 2009 at 3:37 pm 6
aww yeahhhh! you know i love me some budget analysis up in here and shame on me, i haven’t updated my budget nor budget graph in quite some time! Back in march my transportation was 14%, but it only included the car loan and not gas, insurance, etc….

boy, I think i’ll start getting on top of that today. good post
Miss M January 7th, 2009 at 8:54 pm 7
I’ve never done an analysis either, is this supposed to be percentage of after tax income? A lot of money comes out before my paycheck even reaches me, like for my 401k, which I’d consider savings. Even when I was paying off my car loan my percentage (just whipped out the calculator) was 17%, 25% sounds awfully high. Now it’s about 8% including maintenance. I’m driving this thing into the ground, I don’t want another car payment anytime soon. I kept my first car 10 years, I hope to keep this one longer. It is way easier to save when you don’t have a car payment!
Amy January 8th, 2009 at 10:29 am 8
It’s been a while since I did a percentage breakdown. Here’s what I’m showing:

Mortgage: 35%
Transportation: 20%
Tithe: 10%
Savings: 5%
Household bills: 10%
Groceries: 10%
Misc: 10%
LAL January 8th, 2009 at 10:58 am 9
Guess driving beater cars has it’s advantages.
Mary January 10th, 2009 at 1:19 am 10
You might enjoy this:

http://www.daveramsey.com/etc/lms/drive_free/?ictid=Useful_Tools
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Ms. MoneyChat January 12th, 2009 at 4:30 pm 13
My car percentage is 6%. Check out the rest of my percentages here: http://mymoneychat.blogspot.com/2008/11/who-moved-my-cheese.html
Slinky January 14th, 2009 at 11:13 am 14
I occasionally look at this in my budget program, but I haven’t for a while. It also includes all my money since I started budgeting back in college, so it wouldn’t really be accurate anymore. Here’s some rough, off the top of my head numbers. (also net)

Savings: 11% This is my current ‘base’ (minimum) savings rate
Housing: 12% I love my small cheap apartment in the nice area of town. At least until I buy a house.
Utilities: 8%
Food: 9% Includes eating out
Transportation: 6% for operating expenses
Clothing: 2%
Recreation: 4%
School loans: 7% for school loans
Car loan: 20%
Remaining 21% is additional savings/debt repayment

Huh, I guess I really only live on 41% of my income. I knew it was a bit less than half, but it’s really nice seeing it laid out there. Think of what I can do with the other 60% of my income when I pay off all my loans three years (or less) from now!
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