For context, I make about 50k a year. After healthcare, taxes, and retirement contributions, my take-home is around 31k. Since it’s a government job, I have about 7% taken out for retirement each month, which is matched more than double by the state, so I feel really lucky. I’m trying to figure out what a reasonable budget would look like for transportation, food, and other expenses. Would you recommend the 50/20/30 rule or is there something else that you’ve found works better?
I like Ramit Sethi’s CSP. You can download it from his website. Basically, he suggests that your fixed costs should be less than 60%. Fixed costs include housing, debt payments, gas, groceries, utilities, phone, pets, and insurances. Then add about 15% for miscellaneous expenses. So, that total should be under 60% of your take-home pay.
I prefer the 50/20/30 budget, but it really depends on your financial situation. If you have debt, you might need a stricter approach. The 50/20/30 rule allows for some flexibility, but if you’re going over budget, you might need a more detailed spending plan to keep things in check. Just know you should be proud of yourself for budgeting.
The 50/30/20 breakdown is a solid start. Basically, you allocate 50% for needs like rent and bills, 30% for wants, and 20% for savings. Keep your transportation under 10-15% and try to budget food wisely. Focus on the essentials first before you get too complicated with your budget. If you can save more, that’s awesome, but make sure your basics are covered.
I think the 50/20/30 is a good start, but if you’re feeling tight, adjust as needed. It’s really about what feels right for your situation. Just be mindful of where your money goes.
Consider tracking your spending for a month to see where your money goes. That way, you can adjust your budget based on actual expenses rather than estimates. It can really help with sticking to your plan.