"Your Ideal Budget"
>> Tuesday, February 3, 2009
According to CNN, each household's ideal budget should be the following (based on gross income):
Housing & Debt 30%
Taxes 25%
Insurance 4%
Savings and Investment 15%
Living Expenses 26%
This made me want to take a look at my percentages and see where I stack up.
I don't know why they would lump "housing" and "debt" together because frankly, I don't think those can or should be categorized together...
Our Real Budget:
Housing - 49.20% This is terribly high, I realize that, but it includes our mortgage on our Michigan home, our rent here in AZ, our property taxes, and our homeowner's insurance. It doesn't not include any "credits" or rent payments received on the MI home b/c our budget is made so that if we ever didn't get those payments, we could pay all of our bills regardless.
Debt - 12.96% This includes our car payment and student loan payments. I'm not upset necessarily by this number, but I don't like it and I'm working to make it 0% for life baby!
Living Expenses - 21.5% I'm happy that this is almost 5% lower than CNN's ideal budget. My total includes electricity, groceries, gas, cable, cell phone, etc.
Savings - 0% Currently we are not saving anything for retirement b/c according to the Dave Ramsey plan, our debt needs to be paid off first. I'm okay with that b/c I know we'll have all of our debt paid off soon and then I'll be able to exceed the 15% that is considered ideal.
So, where do you stand? Is your budget considered ideal? Are you over in one but under in another?
Kelsalynn
7 comments:
I know that my budget is not ideal. Since buying a home, and being on my own, I put way more money towards my mortgage and such, but I am able to do so. So, I am not too worried about it. Plus, I really don't have too much debt, besides 1 student loan that I am hopefully going to get paid off this year. Let's cross our fingers that I get a big tax return?!? LOL
Can graduate school be a separate category?
I am shocked to see that you're not putting anything towards savings...and are ok with it. I remember talking to you about a year ago and you were apprehensive just to draw about %25 out of what you had saved.
I've listened to Dave Ramsey and I know he's all for paying down debt, but I didn't realize it was at the cost of not saving.
Do you at least have a safety net? I'm of the David Bach school of thought that you should always have 3 to 6 months of emergency savings.
I do, but I'm now rethinking the amounts I put toward my savings and student loan contributions.
Interesting!
Our budget is not ideal right now because I am not working so we cannot save much money (5% or so maybe). We have a lot in savings from before though that we haven't touched.
We're getting close to having our car paid off which is sweet.
I think you're doing great especially considering the situation with the house in MI!
Ok here's your interview questions.. I thought I had your email but couldn't find it. Remember to post the rules at the end of your answers.
1. Where would you take your next vacation if it was completely paid for and money was no object?
2. Are still in touch with many of your high school friends? Did you/will you go to your reunion?
3. What kind of music do you like?
4. Are you planning on having kids, and if so, when?
5. What is your favorite clothing store/brand.. the one that always fits you perfect and suits your style the most?
Have fun!! :)
To play along:
1. Leave me a comment saying, "Interview me."
2. I will respond by emailing you five questions. (I get to pick the questions).
3. You will update your blog with the answers to the questions.
4. You will include this explanation and an offer to interview others in the same post.
5. When others comment asking to be interviewed, you will ask them five questions.
Interesting. I have never figured out the percentages of all this before, but I have recently been questioning the amounts we put in our 401Ks since they are currently tanked.
There is a show in Canada called "Till Debt Do Us Part" which we love to watch. She usually suggests the following breakdown (I think it is a popular breakdown):
Housing - 35%
Transportation - 15%
Daily Living - 25%
10% Debt Repayment
10% Savings.
We are pretty lucky and have no debt so we have that extra 10% which mostly goes into savings.
We also follow the 6 month emergency fund so we have that all saved and just newly put into our new tax free savings account!
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