#PERCENTAGES FOR HOUSEHOLD BUDGET HOW TO#

This might help you to see if there are any major issues in any one area of your budget. This post will help you to work out how you can easily and quickly work out these figures, and it will help you to easily manage your money moving forward. Take 3 month's worth of bank statements, and work out the average monthly spend for each area of your spending. Very few people's finances will fit neatly into this 50 30 20 however the ideal scenario is that if we can plan around this then this will allow us to create wealth and financial security.Ī good place to start is by looking at how your figures stack up against the 50/30/20 recommended budget percentages. Whatever it is that you want, we need to start laying the foundations for that now. I also want to help you to have the freedom to do what you want, whether that be part-time working, early retirement or taking some time off to travel. I want to help you to avoid that scenario, and help you to secure your future. A redundancy or an illness can really throw your entire family into financial meltdown. If you have very little in savings, and no form of emergency fund and are having to meet large debt payments out each month, you know that you are in a very financially precarious position.

#PERCENTAGES FOR HOUSEHOLD BUDGET HOW TO#

At first this depressed me, because I felt that my income was fixed, and I couldn't see how to cut my expenses. I very quickly realised that although we were saving a little, it was nowhere near enough to allow me to live the life in the future. How does it help?īy comparing my monthly budget to these percentages, I could see how much I was spending in each area. If you have a lot of debt you perhaps want to cut your “wants” to less than 30% and allocate more than 20% to paying off your debts. 20% - Savings/extra debt repayments/retirement savings.30% - Wants-Things that you would like, but that are not vital.These are the basic needs, but may vary from person to person.

Groceries, Housing, Transport, Heat/light, minimum payments on debts/loans. In it, they suggested that in order to become financially secure, and grow wealth, we should allocate our take-home pay as follows: Along with her daughter, Amelia Warren Tyagi, she wrote a book ' All Your Worth: The Ultimate Lifetime Money Plan ' It was devised by Elizabeth Warren, a US senator and one of the top 100 most influential people in the world. That's when I discovered the 50-30-20 budget.

The combination of that made me realise that I had choices in life, and that if I wanted to retire early, then I could.as long as I started planning how I could afford to.

Thankfully I started reading about money mindset and financial freedom, and invested in a couple of courses about them. I didn't think I had any option - my pension wouldn't be enough to support me, so I would just have to work until I could afford to retire. I spent a few years feeling miserable about the thought that I would have to continue working longer. I had always thought that I would retire about 55, and was looking forward to having more time to relax, play sport and socialise! Then I discovered that my teacher's pension was going to pay out less than £7,000 per year.if I retired at 60.

We had no debt, we had some money saved and we invested a little money too. I knew that I was saving something each month and I knew that I was paying into my teacher's pension each month, so I assumed that all was good. Before I knew about these recommended budget percentages, I used to save a bit, spend a bit, and if we had anything left over at the end of the month, I would spend a bit more. If you want to stop living payday to payday, start paying off debt and becoming wealthier, then these recommended budget percentages will help you to do just that.

Percentages for household budget