What is a good rule of thumb in budgeting your personal finances?

Question

In other words, how much of my income should be left over after installment payments.......vehicles, mortgage payments, etc.?? for savings? Wanting to buy a house and trying to figure what I can afford.

Answer 1

35% Housing
- Mortgage/Rent
- Repairs
- Taxes
- Utilities
- Insurance

15% Transportation
- Car Payments
- Gas
- Insurance
- Repairs
- Parking/Tolls
- Train/Bus Fees

25% Other Living Expenses
- Eating out
- Vacations
- Entertainment
- Clothing

15% Debt
- Student loans
- Credit Cards
- Personal Loans

10% Savings

That's the reccommended break down for all your finances. But it isn't the limits the mortgage lenders will figure. They generally figure your mortgage/insurance to be any where between 30% - 48% of your monthly income. Depends on your credit and such. It would be best to talk to some lenders and get a pre approval amount.

Answer 2

cpoers21 has a text book answer. What i try to due, is save 25% 25% on housing no debit 25 % other investments and 25% to play. This is on my net do ask about taxes you i would have a lot more. Also i give away about 10% usually out of good investments and the play money.

Believe it or not the 10% is probably the most importing.

Answer 3

A budget is a plan for your future income and expenditures that you can use as a guideline for spending and saving. Although many Americans already use a budget to plan their spending, the majority of Americans also routinely spend more than they can afford. The key to spending within your means is to know your expenses and to spend less than you make. A good monthly budget can help ensure you pay your bills on time, have funds to cover unexpected emergencies, and reach your financial goals.

Answer 4

First rule of thumb is that mortgage payments should be no more then what you take home in 2 weeks. I could not tell you what should be left over because those installment payements can vary greatly from person to person.

Go to a mortgage calculator online and fill it out and it will tell you what you can afford.

Answer 5

when I was saving up to buy my first home, before I was married I could barely save 8% after I married we committed 25% of our income to saving for a home(we felt it was more important than going out ) with in 2 years we were living in that home. by applying the savings to our mortgage after the purchase we paid off our home in only 8 yrs.

Answer 6

Factor in how much you've saved for a downpayment and your emergency fund. Pay off as much debt as you can before buying a home, you'll be glad you did!

Answer 7

Be realistic with yourself; a mortgage is a big investment over a long period of time.. if you can live within your means you're doing well!

Answer 8

how you are able to attempt it really is to save music of how a lot you spend for one month. The worksheet decrease than divides spending into fixed and versatile costs. fixed costs are those that frequently do not replace from month to month, which incorporates lease and coverage funds. versatile costs are those that do replace from month to month, which incorporates nutrients or leisure. If a number of your costs for one or more effective categories replace significantly each and each month, take a three month typical on your entire.

Answer 9

It depends how much you earn, but a realistic target should be around 25%

Answer 10

10% - conservative savings plan to be used towards new home etc

10% - agressive investment plan towards retirement.

80% - consumed and applied towards living expenses including rent, credit card debt, student loans, auto loan, etc...