Every Household Should Have a Budget - Step 2. In the Getting Started blog, you were tasked with tracking all of your expenses for a month. Now that you have started pulling the information together you know when, where and how much you are spending. Was it a surprise? For most it is.
Now that you have an overview of what you are currently spending on a monthly basis, it is time to make some tough decisions and change some habits. Here are a few rules that will help get you on track:
- Rule #1.....DO NOT SPEND MORE THAN YOU EARN!
- Rule #2 .... PUT THE CREDIT CARDS AWAY
- Rule #3....SAVING IS NOT AN OPTION
- Rule #4.... Follow these guidelines to determine what you should spend
- Your housing expenses should be no more than 30% of your income
- Your savings should be 10% of your income
- Your utilities should be 3-4% of your income
- Your food 15-20% of your income
- Medical 5%
- Clothing 2-4%
- Transportation 5-20%
- Debt payments 15-20%
- Miscellaneous 5-10%
Now keep in mind the more you spend in one category will limit the amount you can spend in another.
To check out the other blogs in this series, please click below: