![]() ![]() You’ll notice this budget percentage breakdown doesn’t include savings specifically, though it’s mentioned in part with pensions. If you look at the average spending on housing compared to the total amount spent on average, it represents 32% of the typical household budget. Not surprisingly, housing represents the biggest budget percentage. Personal insurance and pensions: $7,165.Personal care products and services: $786.Food, including food at home and away from home: $8,169.Here’s how consumer spending adds up, according to the Bureau of Labor of Statistics: So I thought it would be helpful to see how much the typical household makes and spends in a year to see how it compares to your household. The Bureau of Labor Statistics compiles information on how U.S. Pretty easy, right? That’s why using budget percentages is so great–anyone can do it with this simple formula! What do average household budget percentages look like? To find the percent spent on housing, you’d use divide your mortgage payment by your total budget amount, then multiply by 100. Your monthly budget adds up to $4,000 and your mortgage payment is $1,000. So, say you want to know what percentage of your budget you spend on housing. The value of a specific budget category or expense.The total amount of money you’re budgeting.To find the percentage of a budget, you need to know: Related post: Why Is Budgeting Important? How do you find the percentage of a budget?įinding the percentage of a budget is actually pretty easy. Then as you spend or pay bills, you take money back out of those buckets. When you budget by percentages, you can create “buckets” for spending instead.Īs you get paid each month, you fill the buckets up. The goal is to have zero money left over. With a zero-based budget, every dollar of your money is given a specific job. It’s a simplified way to create your ideal budget, based on what you earn.Ĭalculating monthly expenses as a percentage of income means you don’t necessarily have to track every single dollar the way you would with something like zero-based budgeting. It just means dividing up your income by percentages each month, then assigning each of those amounts a specific job. The spending percentages method isn’t complicated. Related post: 15 Simple Ways to Save Money on a Tight Budget Budget Percentages: What Does It Mean? Understanding how a percentage budget plan works can help you decide if it’s right for you. There are different ways to create a percentage budget plan, including the: It’s a simple way to divvy up the money you earn each month. When you budget by percentages, you’re assigning a specific percent of your income to different spending categories. If you’re new to budgeting or you’re looking for a better way to manage your money, the budget percentages method could be a great fit. Last Updated on Octoby Rebecca Lake Household Budget Percentages: How Much Should You Be Spending? ![]()
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