Most people feel no matter what their income, they need more money to meet their expenses. Money may not always be the answer. More important is how you budget and then, spend your money.
A budget is a plan for you to live within your means. If you regularly find it necessary to use money from your savings to pay monthly expenses, or are unable to pay all your credit card charges at the end of the month, you need a budget! A budget can help you get more for your money, met your needs for living expenses, provide future security, and stay out of debt.
How to Make a Budget:
- Add up your total income. Include any funds you receive in addition to your earnings.
- Calculate your total fixed expenses such as rent or mortgage, car insurance or car payments, etc.
- Provide for a savings fund, adequate to meet emergencies and achieve special goals. Estimate how much you need for day-to-day living expenses.
- Subtract your expenses from your income. Include fixed expenses, savings, and living expenses here.
- Try it! Put your spending plan to work, and adjust it if necessary.
Spending guideline percentages may be helpful as you examine your spending habits. These spending guidelines are for comparison purposes ONLY. They are NOT hard and fast rules. It’s up to you to decide your priorities; these simply show average expenditures of surveyed household’s from the U.S. Department of Labor Consumer Expenditure Survey.
- Housing 31.8%
- Food 15.6%
- Transportation 17.6%
- Clothing & Services 7.1%
- Health Care 4.6%
- Entertainment 5.6%
- All Other 17.6%