No budget fits all families. For example, data from the Bureau of Labor Statistics shows that urban dwellers tend to spend more on housing and less on transportation costs than rural dwellers. If your income is small, food is likely to consume a bigger percentage of your budget than if your income is large. Still, there are some guidelines to follow to help you structure your budget.
BLS and Dave Ramsey
According to the BLS survey, in 2008, consumers on average spent 33 percent of their after-tax income on housing, about 13 percent on food, 17 percent on transportation, 6 percent on health care, 11 percent on pensions and personal insurance, and about 6 percent on entertainment. In his book "Total Money Makeover," Dave Ramsey recommends spending 25 to 35 percent on housing, 5 to 10 percent on utilities, 5 to 15 percent on food, 10 to 15 percent on transportation and on charitable gifts, and 5 to 10 percent each on health, recreation, debt, savings and personal need.
The 60 Percent Solution
A simple solution is to keep spending to 60 percent of gross income. According to Richard Jenkins of MSN Money, this 60 percent should cover housing, food, charitable contributions, clothing and all bills, including non-essentials such as cable for which you receive a bill. Debt payments and saving for future purchases, vacations and education should come from the remaining 30 percent.
The 50/30/20 Budget
Liz Weston, also of MSN Money, recommends an even tighter budget for people in a hurry to get out of debt. With the 50/30/20 budget, only 50 percent of after-tax income goes to paying necessary expenditures such as mortgage or rent, food, insurance, transportation and anything you are contractually obligated to pay, such as child support. The other 30 percent of after-tax income goes to "wants," including things you might feel you need but you could live without...again, such as cable. The last 20 percent goes to paying debts and savings.
CNNMoney in its Money 101 tutorial recommends spending 30 percent of income on housing, 26 percent on living expenses, 4 percent on insurance and 15 percent on savings and investments. These calculations include 25 percent for taxes.