How Much Of Your Budget Should Go To What?

The Problem.
You try to stick to a budget, but it’s hard to know how much money you should allocate for housing, utilities, food, etc.

The Solution.
We’ve approximated how much of your salary should go to what, but different situations come with different expenses. For instance, in urban areas, rents can be higher than in the suburbs, but you might not need a car. Either way, we believe that the combined cost of housing, transportation, and utilities should total no more than 55% of your income (ideally, less!).

Your health care costs will vary depending on your job and benefits. If your employer picks up the tab, then this number will be lower. If you’re self-employed or employed without benefits, it could be substantially higher.

LearnVest has heeded the experts’ advice and formulated a suggested breakdown just for you.

The Action.
Look through your credit card bill and your bank account statements from the past few months. What’s happening with your money?

Red flags:

• Housing expenses over 35% of your income
• Debt repayment, excluding mortgage, over 10% of your income
• Savings of zero (even if you can’t do 10%, save something)
• Nothing allotted for entertainment (come on!)

If any of these apply to you, start making the changes you’ll need to rebalance your budget!