How to Break Down a Budget so it’s Simple

Budgets are daunting if you aren’t a numbers person. Just getting it set up for the first time is challenging. How are you supposed to know how much money to put into each category? What’s the “responsible” percentages? How to adult?

11 Hilarious Memes About Adulting and Money

Below is a breakdown. 

  • 10% in Giving
  • 10% in Saving 
  • 25% in Housing 
  • 5-10% in Utilities
  • 10-15% in Food
  • 10% in Transportation 
  • 5-10% in Medical/Health
  • 10-25% in Insurance
  • 5-10% in Personal
  • 5-10% in Recreation
  • 5-10% in Miscellaneous

Now, of course, these aren’t perfect for everyone. These are recommended percentages straight from Ramsey Solutions based on research and experience. Percentages are going to be different based on your situation. 

If you have a higher than average salary, some of your categories are going to be much smaller! Like food in particular.

These percentages are a great place to start. Get started budgeting today and break down your spending into these categories. See what percentage you’re putting into each per month. How are you going to have to change your finances in order to hit these targets? 

Here’s the video version for those more inclined to the spoken word!

Let’s look at an example

Let’s pretend you make $50,000 per year. After taxes, you would have about $3300 left per month. Let’s break this down so you can see exactly where you’d be at.

Giving: $330

Whether it is 10% of your pre-tax or your post-tax income, what organizations are doing important work in your eyes that you want to give to? Personally, Bailey and I are Christians and give to our church because we believe in it’s mission.

Giving is important because this is how you keep a healthy perspective of money. I know for me, it keeps my greed in check and reminds me that I’m merely a manager of the money I have.

Saving: $330

Ultimately, we want to get to a higher savings rate than 10%. This is a healthy start, though. Keep in mind, the goal is to hit 15% in saving for retirement. But if you aren’t used to saving, 10% is a great way to get you to that fully funded 3-6 month emergency fund.

Housing: $825

This means keep rent below this if you live in an apartment or a house. Or it means keep your mortgage payment at or below this including property taxes. We’ll cover insurance in a minute.

Utilities: $165-$330

Get your electric, gas, sewer, garbage and water below this all together!

Food: $330-495

Food is an important one and here’s why. Most people spend way too much on food!

People go to the grocery store with no plan, buy things they didn’t plan to buy, get name brand items when generic is almost identical, AND spend far too much eating out.

Food is a simple section of the budget where money can almost vanish without you realizing it. Keep your food budget in check!

Transportation: $330

This will include anything from gasoline to maintenance on your car(s).

For transportation, Bailey and I have two lines. One for gas and one for car maintenance. Maintenance is hard to factor in since it’s not a consistent monthly expense (some months, we spend absolutely nothing on maintenance even though our cars are 180k+ miles). However, if you start a sinking fund for maintenance, it’ll be ready to go when your car isn’t!

Health/Medical: $165 – $330

You’re going to get sick and bad things will happen so be prepared! Of course, insurance does take care of a lot of health and medical things, but you still need to pay for anything from doctor’s visits to medications to deductibles to bandaids. Maybe even bandaids with Olaf on them.

Insurance: $330 – $825

So much insurance!

Home insurance, renter’s insurance, auto insurance, life insurance, health insurance, identity theft coverage – it all counts. Shop around. Get an insurance broker who can shop around for you. They know the industry and can find the best rates while comparing all your options.

Personal: $165 – $330

This is Bailey’s and my favorite section of the budget. We call it the blow funds. I wrote about this recently and you can read it here.

What I love about the blow fund is it is designed to give you some flexibility in your budget. I am convinced that we spend less money on frivolous things because we have blow funds. Then we keep ourselves to a certain amount of personal money instead of spending far more money on a bunch of little justifications.

Make a personal category and let yourself splurge a little each month. Just don’t go overboard!

Recreation: $165 – $330

Here’s the section for any of those entertainment items like clubs, concerts or going to the movies. Though, you might be saving a little money in this category with current Covid restrictions!

Miscellaneous: $165 – $330

Last one. This is for all the miscellaneous items that come up throughout the month. For example, our dog, Jack’s collar broke and we have to purchase a new one! Or we need paint for repainting our living room.

How was I not expecting that?

Regardless, this all goes into miscellaneous. Plus, then it won’t screw up any of my other categories.

Wait! Before you make your new budget!

Here are a couple very important things.

  1. This did not include paying off debt.
  2. This is only a guideline.

If you are in debt, I recommend paying it off as quickly as possible. This means sacrificing some serious money in a lot of those above categories so you can make some progress on your debt payoff.

Check out Dave Ramsey’s Baby Steps in order to get some good direction on paying off debt and getting ahead financially.

Remember, this percentage breakdown is a guideline.

Not everyone’s percentages are going to be the same. Personally, our savings rate is a little higher because we’re preparing for some big home renovation projects coming down the line.

Also, remember you have to make your percentages add up to 100%. If you take the higher number from all of those category ranges, you’ll be over 100% and that’s a good way to go further into debt!

Budget is important. Don’t put it off.

The important thing is start budgeting today! A positive view of money starts with telling it where to go versus wondering where it went. There are lots of great apps you can use for a budget. Check out some that I think are great options here.

If you find you need more help getting your finances in order or even just getting a start on budgeting, shoot me an email at or sign up for a free call below. I’ll coach you through paying off debt and making an effective budget! First session is always free. Start today, don’t way till tomorrow. ⁣

So how’s your budget looking? Are your percentages in the right place? Do you even have a budget? If you are in need of budgeting help, I’m happy to do a free budget review. Just contact me through my website and we’ll start getting you on the right track.


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