When I am coaching clients on preparing a budget, one of the most common questions that comes up is if there are percentage guidelines for each category in their budget. The answer is that it always depends on your unique situation. With that said, here are the recommended percentages for each budget category:
In addition, we have developed a recommended budget percentage worksheet that will help show you if you are within the recommended percentage range. Simply enter your monthly income and your budget and see how well you stack up. Remember these percentages are to be used as a guide, not a rule. Your percentages can change drastically depending on your income and debt levels. For example, if you have a lot of debt, your recreational and savings percentages will be a lot lower to help make your payments. Or if you have a high income, you will want your savings to be higher than the recommended percentage.
As always you can find and use our other free financial spreadsheets and resources on the blog.
It is always good to see where your percentages fall. It can often be an eye-opening experience if you have never done it before and you might realize you need to cut something in your budget to get within the recommended percentages.
So is there anywhere in your budget where you are well over the recommended percentages?