Ask USAA Financial Advice: How much Should I be Spending?

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Contributor

I'm wondering if there is a good guideline for how much I should be spending each month on certain category from my income. Example: 15% loans, 20% food, etc.


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@goose231,

 

Thanks so much for your question!  Any budget you make will be tailored fit to you – the things that are necessities for some are luxuries for others, and not all of the categories below will apply.  However, I know it can be a bit daunting to get started, so having some general guidelines for categories can certainly can help.

 

Here’s USAA’s take on some percentages to help you get started – The ranges exist for your situation, but it can’t add up to more than 100% 😊

 

Saving                                                          10-15%

Housing                                                       25-36%

Food                                                             10-15%

Auto expenses                                            10-15%

Gifts/Charitable Giving                              5-10%

Child Care                                                     5-10%

Medical/Dental (co-pays, deductibles      5%

Insurance (Health, Dental, Life, etc)         5%

Debts                                                             5%

Personal Care/Clothing                              5%

Entertainment                                             4-6%

Miscellaneous                                              4-7%

Total                                                              100%

 

I also wanted to include a couple of keys to a successful budget:
 
1.  Pay yourself first - One of the most important things you can do is set aside savings first and then live off of what is left, not the other way around.
2.  Use it! Keep it up to date and adjust as needed - Follow and track your spending each month to make your budget pay off.
3.  Think before you spend - Build in some fun. Avoid breaking your budget by allowing some room for reasonable, guilt-free spending.
4.  Make it a team sport -  If you have a spouse or partner, be sure you are playing for the same team by discussing your game plan. You are more likely to stay within your budget each month if you do.
5.  Don’t give up – If you get off on a month, adjust your plan and get back on track.  The results of your hard work should really pay off over time.

 

A final note – the best budgets are ones that help you make positive decisions going forward – not so much blaming what has happened in the past (wither blaming yourself or a partner).   Knowing were you came from and your old spending patterns can certainly help, but the goal is to do less tracking backwards and instead enable better decisions in the future.

 

Good luck!

 

-Matthew

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1 REPLY

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@goose231,

 

Thanks so much for your question!  Any budget you make will be tailored fit to you – the things that are necessities for some are luxuries for others, and not all of the categories below will apply.  However, I know it can be a bit daunting to get started, so having some general guidelines for categories can certainly can help.

 

Here’s USAA’s take on some percentages to help you get started – The ranges exist for your situation, but it can’t add up to more than 100% 😊

 

Saving                                                          10-15%

Housing                                                       25-36%

Food                                                             10-15%

Auto expenses                                            10-15%

Gifts/Charitable Giving                              5-10%

Child Care                                                     5-10%

Medical/Dental (co-pays, deductibles      5%

Insurance (Health, Dental, Life, etc)         5%

Debts                                                             5%

Personal Care/Clothing                              5%

Entertainment                                             4-6%

Miscellaneous                                              4-7%

Total                                                              100%

 

I also wanted to include a couple of keys to a successful budget:
 
1.  Pay yourself first - One of the most important things you can do is set aside savings first and then live off of what is left, not the other way around.
2.  Use it! Keep it up to date and adjust as needed - Follow and track your spending each month to make your budget pay off.
3.  Think before you spend - Build in some fun. Avoid breaking your budget by allowing some room for reasonable, guilt-free spending.
4.  Make it a team sport -  If you have a spouse or partner, be sure you are playing for the same team by discussing your game plan. You are more likely to stay within your budget each month if you do.
5.  Don’t give up – If you get off on a month, adjust your plan and get back on track.  The results of your hard work should really pay off over time.

 

A final note – the best budgets are ones that help you make positive decisions going forward – not so much blaming what has happened in the past (wither blaming yourself or a partner).   Knowing were you came from and your old spending patterns can certainly help, but the goal is to do less tracking backwards and instead enable better decisions in the future.

 

Good luck!

 

-Matthew

View solution in original post