My budget: Housing 43% Save 10, Debt 15% and other 32% Good or Horrible?

Answer 1

If I may suggest you to look into your "other" category, it appears to be pretty high, (1/3) of the total unless it is pertaining to the "living cost" category. If 32% is on entertainment, leasing a bimmer...etc, those high end spendings, then you should revisit your budget asap.

43% of total on housing is generally considered high, however, how much is the 57% in dollars? i.e. 57% of a million dollars means $570,000 which is super...on the other hand, if 57% on $2,000, meaning $1,140 left for everything else is kind of tight. All of which to say, the percentage is only a guideline, it is hard to say good or horrible by just looking at a few percentage figures...

You have to look at your actual dollars spent every month, and saving money is always good....however, how much interest you get from your savings, and how much interest spend on your debt??

Would that be better off to pay off your debt before savings?
Do yourself a favour, pay off high interest debt with lower interest debt. i.e. line of credit vs. Credit card, and pay off debt before investing / saving for lower interest return (usually lower than loans)...if you have to pay 6% on your loan, pay it off meaning making 6% return on your money without any risk at all and NO tax implication unless you borrow money to invest in a not only capital gain investment tool, then you can claim your interest expense.

Anyway, I can go on for hours on your financial planning and tax planning...Good luck to your monthly budget.

Answer 2

That's not horrible. Consider to use (part) of the saving to pay off (high interest) debts. It will bring in more than just saving. Most important: does it provide for everything you need this way and does it give you peace of mind. If so, it really doesn't matter very much how you divide your money. If not, you have to look at ways to change it. If possible try to loose the debts, thus creating more wealth in the end for you/your family.

Answer 3

Hey, you're budgeting -- that puts you ahead of 90% of the population already, I'd say.

Paying off debt in your budget is wonderful, as long as you're paying more than the interest.

Make sure your "other" is broken down into sections, if you haven't already. Food, gas, utilities, entertainment, and so on. That way you know if you're about to spend too much on each.

Bills that are the same every month -- cable, for instance -- should be taken out of your net budget right at the start, before you calculate the rest.

If you're making monthly payments on your mortgage or rent, see if you can split them across the month. For example, taking $450 out of each bi-weekly paycheck, instead of paying $900 at the end of the month. This reduces stress a LOT. There are companies who will do this for you, you just send the payments to them.

Also, I highly recommend paytrust.com. They take care of all of your bills, so you don't have to worry about sorting out the mail on time. The bills are sent to them, they email you reminders, and you can look at them online when you need to pay.

Good luck!

Answer 4

Housing way too high; best would be 25% (utilities not included in that - they would be in your 'other'). When paying off a debt, sooner the better, so if you need 15%, so be it. Saving 10% is excellent. Sharpen your 'other' at 32% till debt free. Good Luck! Fun, isn't?

Answer 5

First of all, that isn't a budget.

Second of all, unless you break it down into actual numbers it's impossible to tell.

For instance, if you have a mortgage payment that is 43% of your net income, but you are building equity - then that is better than paying 43% of your gross income for rent.

Also it depends what your "other" is being spent on. You could be utilizing every spare penny, or wasting all of it - how would anyone be able to tell without an itemization?

Based solely on the information you provided, and with only the two choices available I would have to choose horrible.

Sorry.

Answer 6

Saving 10% is great.
They say that housing should be in a range of 20% to 35%. But if you are including your utilities with that, then you are nearly within the recommended range.

Here is a list of guidelines I found:
The first percentage given is the recommendation, and then a comfortable or affordable range is given:

• Personal debt (credit cards, personal loans), 14 percent, with a range of 10 percent to 20 percent.

• Housing, 27 percent. Range: 20 percent to 35 percent

• Food, 21 percent. Range: 15 percent to 30 percent.

• Transportation (including car loan, insurance, gasoline, etc.), 8 percent. Range: 6 percent to 20 percent.

• Utilities, 6 percent. Range: 4 percent to 7 percent.

• Clothing, 4 percent. Range: 3 percent to 10 percent.

• Miscellaneous (travel, child care, entertainment, gifts), 1 percent. Range: 1 percent to 4 percent.

• Savings, 7 percent. Range: 5 percent to 9 percent.

• Insurance (health, life, disability), 6 percent. Range: 4 percent to 6 percent.

• Personal care, 3 percent. Range: 2 percent to 4 percent.

• Health (prescriptions, eye care, dental), 3 percent. Range: 2 percent to 8 percent

Answer 7

Housing too high, should be 33% or less

Answer 8

Sounds pretty sensible to me, especially if you can stay within it.