How to Give Your Budget a Makeover and Press Reset

How to Give Your Budget a Makeover and Press Reset USAA Community.jpg

We get so many good questions in Community about topics ranging from where to donate old uniforms to how to request on official cashier’s check. This month as many of us are hitting “reset” we wanted to highlight some member questions that could help you start of 2021 on the right financial foot! This year, I am not making resolutions, the ones I made for our “quarantine” came and went without being accomplished and I don’t want to make goals that I cant keep! I can, however, commit to increasing wisdom in different areas. So, if you are like melet’s put the normal New Year’s resolutions on hold and focus on ways we can improve by learning from others.  


Community user @goose231asked a question about the best way to break down a budget and we are highlighting it here in hopes it will give you a starting place to get your budget together and help you get ahead with your finances in 2021 


Q: 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.”- @goose231 


A: Mikel Van Cleve from USAA: 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 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 (whether blaming yourself or a partner).  Knowing where 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! 


How does this breakdown compare to how you handle your spending? (I would need to add a category specifically to cover purchases from Amazon!) Please share in the comments. 


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