Existing accounts perch on a narrow evidentiary base: few countries, few indicators (often proxies), short time frames, poor comparability across sources and countries, unrepresentative groups such as the top 1 percent. New articles posted each month.The aim of the Historical Household Budgets (HHB) project is to rewrite the history of both inequality and poverty over the last two centuries, and to make that history international. Read more helpful financial information and articles on the Spirit Financial Blog. Whatever works for you and keeps you on track in ensuring your monthly spending does not exceed your income is what you should use. There’s nothing wrong with tracking on your own through excel or even using good ole fashioned pen and paper. Tracking through a budgeting app, such as Mint, PocketGuard, or YNAB, might make it easier and more efficient to monitor your saving and spending. Careful monitoring of your budget will mean the difference between success and failure. Once you’ve created your budget you need to track your spending each month to be sure you are sticking to it. Miscellaneous – 5-10% Budgeting can help you avoid debt and achieve goals
For instance, if your mortgage and insurance costs are on the higher end of the range, you’ll have to adjust other areas, such as entertainment, personal spending, and giving down. It may give you a place to start when creating a budget and a better idea if you are overspending in certain areas. It is a range, so keep in mind you can’t be on the higher end of the range in all categories or you will be over budget.
Once you’ve tracked your spending in all of these categories, there’s a general rule of thumb regarding how much you should be spending in certain areas.
Miscellaneous – Any other monthly expenses, such as childcare or babysitter, pet care, organizational memberships, gifts.Insurance – Health insurance, car insurance, homeowners insurance, renters insurance, life insurance, etc.Healthcare – Copays, medications, doctors/dental visits.Entertainment – Activities, gym memberships, hobbies, vacations, subscriptions, etc.Savings – Retirement, emergency, and general savings.Personal spending – Clothing, hair/salon, home goods, etc.Utilities – Electric, gas, water, sewer, trash collection, phone, internet, cable, streaming.Transportation – Car payments, gas, car maintenance and repair, registration, parking fees, E-Z pass cost, public transportation.Housing Costs – Mortgage/rent, taxes, maintenance costs.Categorizing also makes it easier to find ways to improve your budget. While this may work for some, it’s often better to start with a more detailed categorizing of expenses to get a better handle on your spending. That rule suggests you should spend 50% of your after-tax pay on needs, 30% on wants, and 20% on savings and paying off debt. The 50/30/20 rule is a simple way to budget that doesn’t involve a lot of detail and may work for some. Setting budget percentagesīudget percentages can be a good way to guide you as to how much you should be spending on various items each month, giving you a more realistic budget to work with. While developing and sticking to a realistic budget can be stressful, getting a handle on your spending can help you live a more financially secure life. It’s also important to plan for emergency expenses, such as a car or home repair or health emergency. To get a better idea of these costs, take a look at your bank and credit card statements. They include items such as groceries, gas, healthcare, clothing, dining out, entertainment, hobbies, haircuts, charitable giving, and vacations. Your variable expenses may change from month to month. These costs stay relatively the same and are easier to track. Your fixed expenses will include your recurring monthly bills, including mortgage or rent, phone and utilities, insurance, car payment, savings/retirement, childcare, tuition, and gym memberships for example. With a little research through your statements, you may be surprised to see just how much you’re spending. Don’t record what you think you should be spending on items such as groceries, but what you actually are. When calculating expenses, put them into categories. When determining income, use the amount you bring home after taxes and after any other deductions, such as child support, are taken out. A realistic budget starts with determining your monthly income and then calculating all of your monthly expenses.