Saturday, 4 February 2012

Budget: Percentages of income

Have you sat and thought about how much of your wages you spend on different things?

I'm sure most people interested in reducing debt and living frugally have a budget. What I was wondering is what percentage of your pay do you allocate to various things?

There are many different alternatives and of course what works well for some people might not work well for others. In my opinion it also depends how much income you bring home to start with; for example, a third of your wages for rent/mortgage payments might sound reasonable, but the average rent in Cornwall (£699 per month) is around 50% of the average take home pay (£1385 net per month).

Last month I spent:
19% on housing (set rate)
12% on bills (set rate)
10% on basic living costs like fuel and some food (fairly set)
15% on wants like entertainment and non-vital purchases (have been spending more than my target lately :-/)
and 44% was savings, both for an emergency fund and for annual expenses like car maintenance.

I am living with my parents for a year after graduating university. It's not glamorous, but it is allowing me to spend that third of my wages on both rent AND bills combined. I'm sure this report would look a lot different this time next year, when I will hopefully be back at Uni!

Have you taken a look at how well you matched your budget with your spending? I have been monitoring my spending for the past month. It has really helped me to see what I'm doing well and what I need to cut back on. Top priority: use some free entertainment ideas this month!!


cumbrian said...

A difficult task, only way is to write down everything spent, which gets a bit boring, and varies from week to week.

hoppity said...

Spookily my housing is also 19% and my savings 44%, bills are a little more tricky to budget for exactly as some are annual, others monthly and water is bi-annually. I'm always borrowing money from one 'fund' or another to cover my costs!

Frugal Down Under said...

I should have my budget completed soon and up on my blog. I've been procrastinating on it.

saving for travel said...

I constantly monitor all spending excluding our personal spending money.

Sft x

Meanqueen said...

I don't know how to work out percentages. Even if I knew, the figures wouldn't mean much to me anyway. All I do is prioritise my spending, cut out things I don't need so I have enough money to buy what's important to me.

Spankthemagicmonkey said...

I would but i just dont have the attention span for it in addition to my personal hatred of all maths.

I live on the principal that if i need to save i do so to the best of my ability regardless of timescale rather than dragging out the saving over a longer period of time.