This post is part of our 21 Days to a Better Budget Series! To view all the posts in our series, please click here.
If you’ve been budgeting for any length of time or have been searching the vast knowledge of Google for budgeting advice, you’ve more than likely come across those “recommended percentages” for budgeting.
You know the only spend 5% on this and 10% on that. But how much should you really be budgeting for those things and are they even important?
If you’ve ever read my 50/20/30 budget post, you know that I’m a huge fan of the simple method of that budget. It makes the whole figuring out percentages thing easier but most people still have questions about it.
Why? Because the way money works in my household is different than how it works in yours.
Sure, we both might have a mortgage and have kids that seem to outgrow their clothes overnight, but the way we manage our money and what we value are two very different things. So, realistically, my percentages are going to look different than yours.
And that’s okay.
I’m a firm believer that no more than 50% of your income should go towards your essentials, but your essentials may include things that mine doesn’t – like prescriptions that are essential to keeping you alive.
Or maybe your lifestyle will have your 30% looking very different than mine. Maybe you value backpacking through Europe more than having a house so your 50% category is way less than 50% of your income.
Should you freak out? Nope. You’re balancing out the percentage with your lifestyle cost since more than likely the majority of your income earned is going towards funding your amazing life adventure.
Don’t get too caught up in making your budget look like everyone else’s. You are you, and that is truer than true. So, don’t beat yourself up if your percentages are a little off. Simply look at your lifestyle and what you value most – do those percentages line up with that? If so great! If not, find out why. After all, you want your budget allow you to live your life and to thrive – not merely survive it.
What to do if your lifestyle and percentages don’t match
So, what do you do if you find yourself in the common predicament of your lifestyle not matching your budget? Believe it or not, most folks fall victim to this once in a while because we get too caught up in either the game of discontentment or simply are bitten by the spending bug.
Sometimes we over shop. Sometimes we feel like we’re in constant competition with our friends on Facebook and as a result spend way more money on things that are not important and don’t add up to our lifestyle’s values.
If this happens, put yourself on a spending freeze and evaluate your financial goals and determine where your priorities are. Is your spending matching up? If not, freeze your spending immediately and only stick to making purchases for groceries, fuel/transportation, and paying your bills.
Once you’ve got your spending under control, then move on to re-calculating your budget based on your priorities. This will help you figure out how to make your money work for you and how you can build a budget that works for your lifestyle.
What’s your best advice for following those “recommended percentages”?
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