Realistic budget categories?

[kate1482]

Is there a website that you can plug in net salary and it shows percentage amounts that ideally would go to each budget category?

[sandandsea]

Oprah, Suze Orman, and Dave Ramsey all have percentages for different buckets like housing, cars, etc. they all vary slightly but are easy to find in Google and see what makes sense for you.

[dr.girlfriend]

I was curious so I looked. This was the first hit on Google, seemed interesting. Notice it's asking for NET income, not gross.

financialmentor.com/calculator/budget-calculator

[kate1482]

Nov 22, 2018 13:59:25 GMT -5 dr.girlfriend said:

I was curious so I looked. This was the first hit on Google, seemed interesting. Notice it's asking for NET income, not gross.

financialmentor.com/calculator/budget-calculator

Thanks! This is what I was loooking for.

[dr.girlfriend]

Nov 22, 2018 14:21:51 GMT -5 kate1482 said:

Nov 22, 2018 13:59:25 GMT -5 dr.girlfriend said:

I was curious so I looked. This was the first hit on Google, seemed interesting. Notice it's asking for NET income, not gross.

financialmentor.com/calculator/budget-calculator

Thanks! This is what I was loooking for.

Weird though it doesn't seem to have a category for savings outside retirement.  But I guess you can try to get below the numbers and save the extra.  :-)  In my experience it was way low on utilities (their number wouldn't even pay for internet, let along energy bills) but high on transportation.

[sillygoosegirl]

Nov 22, 2018 22:12:10 GMT -5 dr.girlfriend said:

Nov 22, 2018 14:21:51 GMT -5 kate1482 said:

Thanks! This is what I was loooking for.

Weird though it doesn't seem to have a category for savings outside retirement.  But I guess you can try to get below the numbers and save the extra.  :-)  In my experience it was way low on utilities (their number wouldn't even pay for internet, let along energy bills) but high on transportation.

It does have a debt category, which is sometimes used interchangeably... although potentially it should be a higher amount when you are moving from a prior habit of buying things on credit to saving up to pay cash for stuff.

[dragon's breath]

There was a Canadian show called Til Debt Do Us Part, where the lady, Gail Vaz-Oxlade used a "cash jar" system similar to Dave Ramsey's "envelope system". She accounts for debt repayment, but also, long term savings (unlike what I've heard about with DR, who, from what I've heard, recommends passing up even retirement savings that have an employee match until you are out of debt--something I very much disagree with. But, I might be misunderstanding that.)

Anyway, her recommendations:

gailvazoxlade.com/blog/archives/604

The percentages are:

35% for housing (mortgage/taxes, rent, utilities, insurance, maintenance),
15% for transportation (car payments, gas, repairs, insurance, parking, transit),
10% for saving (long-term saving),
15% for debt repayment, and
25% for life (everything from groceries to entertainment, medical to childcare… In fact, everything that’s not in the other four categories.)

The percentages are actually on the interactive budget beside the s/b (for “should be”) so you can see how your numbers compare to a balanced Life Pie. Find the budget through Gail’s Guide to Building a Budget, and read the instructions. It’s under the Gail’s Tools section on the blog.
...

If you do have consumer debt, the 15% guideline only means that if you are spending more than 15% of your income paying off your consumer debt you have waaaaay too much debt. IT DOES NOT MEAN you should only put 15% of your income to debt repayment. You need to put as much of your income into debt repayment as necessary to get all your consumer debt paid off in three years or less. And if that means your debt category is up to 25%, 30% even 40% of your income, so be it. Then you have to cut back elsewhere or make more money to have enough for the other categories.

There are a few seasons of the show on Amazon Prime.  Fairly repetitive after a few episodes, and the advice seems to be very basic, for people who really struggle to control their spending, but it's entertaining enough.

ETA: Her numbers are for Canadians, so the "medical expenses" may warp that 25% for us in the states.

[dragon's breath]

This is her "Build a Budget" worksheet that might be kind of what you are looking for...

You fill in your net income, fixed expenses, etc, and it shows the percentage you are spending (and shows what she recommends). Then it has you fill in all the variable stuff so you can give yourself an "allowance".

It may make more sense if you watch a few of the shows. There may be some on youtube if you don't have prime.

www.gailvazoxlade.com/resources/interactive_budget_worksheet.html

[dr.girlfriend]

Nov 23, 2018 1:01:42 GMT -5 dragon's breath said:

There was a Canadian show called Til Debt Do Us Part, where the lady, Gail Vaz-Oxlade used a "cash jar" system similar to Dave Ramsey's "envelope system". She accounts for debt repayment, but also, long term savings (unlike what I've heard about with DR, who, from what I've heard, recommends passing up even retirement savings that have an employee match until you are out of debt--something I very much disagree with. But, I might be misunderstanding that.)

Anyway, her recommendations:

gailvazoxlade.com/blog/archives/604

The percentages are:

35% for housing (mortgage/taxes, rent, utilities, insurance, maintenance),
15% for transportation (car payments, gas, repairs, insurance, parking, transit),
10% for saving (long-term saving),
15% for debt repayment, and
25% for life (everything from groceries to entertainment, medical to childcare… In fact, everything that’s not in the other four categories.)

The percentages are actually on the interactive budget beside the s/b (for “should be”) so you can see how your numbers compare to a balanced Life Pie. Find the budget through Gail’s Guide to Building a Budget, and read the instructions. It’s under the Gail’s Tools section on the blog.
...

If you do have consumer debt, the 15% guideline only means that if you are spending more than 15% of your income paying off your consumer debt you have waaaaay too much debt. IT DOES NOT MEAN you should only put 15% of your income to debt repayment. You need to put as much of your income into debt repayment as necessary to get all your consumer debt paid off in three years or less. And if that means your debt category is up to 25%, 30% even 40% of your income, so be it. Then you have to cut back elsewhere or make more money to have enough for the other categories.

There are a few seasons of the show on Amazon Prime.  Fairly repetitive after a few episodes, and the advice seems to be very basic, for people who really struggle to control their spending, but it's entertaining enough.

ETA: Her numbers are for Canadians, so the "medical expenses" may warp that 25% for us in the states.

Interesting...I wouldn't have realized that car insurance and repairs were in transportation, that makes sense that it's higher than I would have thought. 

[edavis]

Nov 23, 2018 1:01:42 GMT -5 dragon's breath said:

She accounts for debt repayment, but also, long term savings (unlike what I've heard about with DR, who, from what I've heard, recommends passing up even retirement savings that have an employee match until you are out of debt--something I very much disagree with. But, I might be misunderstanding that.)

Yeah, I’m not a Dave evangelist but he actually recommends foregoing retirement savings only BEYOND what is matched by your employer, until you are out of debt. He does not advocate passing up free money. Just needed to say that in case anyone was thinking that might be a good idea!

[dragon's breath]

Nov 23, 2018 18:10:33 GMT -5 edavis said:

Nov 23, 2018 1:01:42 GMT -5 dragon's breath said:

She accounts for debt repayment, but also, long term savings (unlike what I've heard about with DR, who, from what I've heard, recommends passing up even retirement savings that have an employee match until you are out of debt--something I very much disagree with. But, I might be misunderstanding that.)

Yeah, I’m not a Dave evangelist but he actually recommends foregoing retirement savings only BEYOND what is matched by your employer, until you are out of debt. He does not advocate passing up free money. Just needed to say that in case anyone was thinking that might be a good idea!

That's good to know!  I don't remember where I heard it (one of his shows, or second hand), but "I heard" that he had said not to put any money into the 401k, even with a match, until he was out of debt.

That, IMO, would be very bad advice.  Never turn down a doubling of your money!