percentage breakdown of household budget

PERCENTAGE BREAKDOWN OF HOUSEHOLD BUDGET FULL

You’ll have to buy his book for the full system, but for a good overview check out The Barefoot Budget here. This is a budgeting rule outlined by the Barefoot Investor Scott Pape. 30% of your take-home income is on discretionary spending – this might include entertainment, travel and eating out.Īs an example, if you earn $1,000 a week your budget looks like this: $500 towards living expenses, $200 towards savings and pay off debt and $300 towards entertainment, travel and eating out.20% of your take-home income is put into achieving your financial goals – such as debt reduction, savings and investments.50% of your take-home income is spent on living expenses includes – things like rent/mortgage, groceries, utilities and transportation.This budget was created by Harvard Professor and bankruptcy expert Elizabeth Warren. The break down for this budget is 50% on living expenses, 20% on achieving financial goals and 30% on wants or discretionary spending. You are also able capture quarterly things like utilities, but don’t forget to include your big annual expenses too which might include car registration, rates, insurances and that type of things.īoth of the budgets outlined below are based on a percentage of your income going towards certain things, they don’t necessarily take into consideration your actual current spending – rather the suggestion is that you should adjust your spending and expenses to fit in line with ratios outlined. We’d suggest going back three months to get a good snapshot of your recent spending activity. This afford you the opportunity to make some changes. From there you can determine what is essential and where you might be able to save some money to go towards bigger financial goals. Taking the time to go through your income and expenditure is important to being able to categorise your expenses. If you’re not sure where your money is going, there’s a lot of different apps you can use (like ASIC’s TrackMySpend) that can help you with this information or you can get an app that syncs in directly with your bank account (or maybe you already have you bank app on your phone which provides this). Getting started on your budgetīefore you jump in and implement any budgeting rule or changes to your budget, we’d suggest having a look at what you’re currently spending and making a note of whether they’re needs/essentials, wants or likes.

Finally, we discuss how budgeting helps you achieve your financial goals sooner. We look at what they are and what your income looks like when split this. In this article we talk about budgeting in general and two different ways of running your own household budget: the 50/20/30 Budget and 60/20/20 Budget.

Percentage breakdown of household budget