What is a good % of income to spend on....?

**imagine** · 01-29-2010, 11:29 AM

I'm trying to figure out % of net income is considered good/reasonable to spend on categories.

It seems that some of our areas are high but I'm not sure if I'm being unrealistic or not.

**TigerGirl1226** · 01-29-2010, 11:43 AM

I have no idea, but I will interested to see what others have to say.

**Greebo** · 01-29-2010, 11:57 AM

Dave Ramsey suggests:

ITEM	Percentage
GIVING	10-15
SAVING	5-10
HOUSING	25-35
UTILITIES	5-10
FOOD	5-15
TRANSPORTATION	10-15
CLOTHING	2-7
MEDICAL HEALTH	5-10
PERSONAL	5-10
RECREATION	5-10
DEBTS	5-10

**mauimagic** · 01-29-2010, 12:00 PM

Mahalo G - that is a percentage spread that makes a wonderful goal!!

**imagine** · 01-29-2010, 12:03 PM

Originally Posted by Greebo

Dave Ramsey suggests:

ITEM	Percentage
GIVING	10-15
SAVING	5-10
HOUSING	25-35
UTILITIES	5-10
FOOD	5-15
TRANSPORTATION	10-15
CLOTHING	2-7
MEDICAL HEALTH	5-10
PERSONAL	5-10
RECREATION	5-10
DEBTS	5-10

So what would be in personal?

And are those percents of net or gross?

**Greebo** · 01-29-2010, 12:18 PM

Originally Posted by imagine

So what would be in personal?

And are those percents of net or gross?

http://www.daveramsey.com/tools/budget-forms/

PERSONAL
Life Insurance
Child Care
*Baby Sitter
*Toiletries
*Cosmetics
*Hair Care
Education/Adult
School Tuition
School Supplies
Child Support
Alimony
Subscriptions
Organization Dues
Gifts (incl. Christmas)
Miscellaneous
*Blow Money

And net I think - since we have no say on taxes.

**imagine** · 01-29-2010, 12:34 PM

Thanks that helps a lot

If I come up with more questions I'll ask.

**monkeywrangler71** · 01-29-2010, 12:50 PM

That savings percentage is way too low, unless you are deep in debt - in which case the recreation percentage is too high. 10% absolute minimum for savings, or else be prepared to work until you're ninety.

Your age is also a factor - the percentages should change as you get older. People in their prime earning years should be paying debts and saving much more agressively. Mortgages should be retired long before you are.

**TigerGirl1226** · 01-29-2010, 12:57 PM

Dave's suggestions in the housing and food work good for me. Including education in personal doesn't seem to work for me. Personal including gifts, organizational dues, and personal care items sounds reasonable.

Medical, personal, recreational and debt all being 5 to 10% seems a little odd to me. If I only put that much toward debt, we'd be in big trouble. And if put that much toward recreation and only the same amount to debt, it just wouldn't make sense to me.

Just my opinions. I guess that's why they are just guidelines. We each have to tweak it to our personal situtions.

**mombottoo** · 01-29-2010, 05:27 PM

Originally Posted by Greebo

Dave Ramsey suggests:

ITEM	Percentage
GIVING	10-15
SAVING	5-10
HOUSING	25-35
UTILITIES	5-10
FOOD	5-15
TRANSPORTATION	10-15
CLOTHING	2-7
MEDICAL HEALTH	5-10
PERSONAL	5-10
RECREATION	5-10
DEBTS	5-10

You would have to adjust the amount spent depending upon your family's needs. If you add the percentages on the high end together they equal way more than 100%.

IMHO 5-10% is way too low for savings...when my dh was working we contributed 16% to 401(k) and that percentage didn't include regular savings, just the retirement portion. He had an additional $25.00 per week taken out automatically & put into our credit union savings account and of course I had my own savings account at that time too.

**dcompton** · 01-29-2010, 06:18 PM

It's interesting that this topic should come up now. I am tracking expenses right now because I wanted to see how my percentages work out. DR's breakdown will be quite different from my actual, since I have no debt to repay and I'm working aggressively on saving. I want to do this over the year since discretionary expenses vary so much month to month.

Does anyone know is DR's are fairly normal, or do others make other recommendations.

**Greebo** · 01-29-2010, 08:28 PM

Originally Posted by mombottoo

You would have to adjust the amount spent depending upon your family's needs. If you add the percentages on the high end together they equal way more than 100%.

If you added up the low end they're way less. They're ranges so one can be higher and another can be lower.

IMHO 5-10% is way too low for savings...when my dh was working we contributed 16% to 401(k) and that percentage didn't include regular savings, just the retirement portion. He had an additional $25.00 per week taken out automatically & put into our credit union savings account and of course I had my own savings account at that time too.

Well on the DR plan your FFEF is done before you do any retirement, and then your retirement is 15% - hmm his ranges are a little off for that one I agree.

**imagine** · 02-01-2010, 08:58 AM

So the totals are in for this month and they aren't in line with the recommendations

Food 25%

Medical was higher too Son's medicine alone is 2% of our net income each month. medical insurance cost is taken out before so is not included in our net.

There were some categorizes that were less too, like housing, personal, and recreation.

**Greebo** · 02-01-2010, 09:05 AM

Food is highly dependent upon income. If you only make $20k a year and need 400/mo to feed a family of 8, 25% isn't out of whack. On the other hand, if you make $100,000 a year and you are spending 25% on food then you probably either eat out way too much, or you're the size of the good year blimp.

**imagine** · 02-01-2010, 10:21 AM

Originally Posted by Greebo

Food is highly dependent upon income. If you only make $20k a year and need 400/mo to feed a family of 8, 25% isn't out of whack. On the other hand, if you make $100,000 a year and you are spending 25% on food then you probably either eat out way too much, or you're the size of the good year blimp.

very good point