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General Guidelines
50/20/30 Rule:

  • 50% or less of your take-home pay should go to essentials like rent, groceries, transportation to and from work, and utilities
  • 30% or less should go to lifestyle choices like shopping, entertainment, going out with friends, etc.
  • 20% or more should go to priorities, like saving an emergency fund, saving for retirement and paying off debts (credit cards, student loans, etc.)
How to Budget Your Money: The 50/20/30 Guideline |
30%    Housing
10%   Utilities and other housing expenditures (including renters insurance)
40%   Housing + Utilities 
15%   Food (at home and away) 
10%   Transportation (including car loan) 
10%   Debt repayment (student loans and credit cards)
10%   Saving
 5%   Clothing
 5%   Entertainment
 5%   Car insurance and miscellaneous personal expenses
Source:Home Budget: Cost-Of-Living Reality Check - Quicken Support

Source: Family Budget: How to go Broke on $100,000 a year. Why the Middle Class has a hard time Living in Expensive Urban Areas.|, 2008 Debt:
Bank of America, which adheres to the guidelines that Fannie Mae and Freddie Mac set, will let your total debt (including student and other loans) hit 45 percent of your pretax income, but no more.

Dave Ramsey, who takes a conservative view, wants your housing payment (including property taxes and insurance) to be no more than 25 percent of your take-home income.

It's hard to make generic rules for budgets. It depends on,
Where you live:
The Missouri Economic Research and Information Center (MERIC) computes a cost of living index by state. Hawaii is 90% more expensive than Mississippi, California is 43% more expensive than Iowa.
The biggest difference is in housing, with Conn. more than twice as expensive as Mississippi while food is only 35% more.
See Cost of living by location in Household Spending

Your family situation:
DINKs (Dual Income, No Kids) will plan differently than single people, a 2 person 1 income 2 kid family, or a single parent etc.

Your phase in life:
Just out of school no kids (recreation, entertainment, debt repayment), Raising kids (clothing, food, transportation), Empty nester, Retired (entertainment, travel) and income.

Your income:
Item $25-40,000 >$100,000
housing 31.1% 30.2%
  Owned 11.4% 14.0%
  Rented 5.1% 1.8%
Transportation 18.8% 17.6%
Food 13.5% 11.4%
Personal insurance and Pensions 10.7% 15.6%
Entertainment 4.9% 5.1%
Apparel and Services 5.0% 5.3%
Health care 5.3% 3.8%
See Cost of living by Income

See Household Spending 1990-2014

There is a big range depending on the factors above.
By Household Unit Composition
Item Married couple only Married couple with children Other married couple consumer units One parent, at least one child under 18 Single person and other consumer units
Food 11.8% 12.9% 14.5% 14.8 12.4%
Housing 30.5% 31.8% 30.5% 38.0% 36.7%
Transportation 17.5% 17.3% 18.6% 17.0% 15.9%
Healthcare 10.3% 7.3% 7.8% 5.1% 7.3%
Personal insurance & pensions. 11.1% 12.5% 11.6% 7.5% 8.9%
Source: Consumer Expenditures - 2014 (
The percentage below are based on a person earning just enough to get buy.
2 adults:         $35,000-$44,000
2 adults 1 child: $48,000-$65,000
2 adults Housing+utilities 23-42% Durhan, NC - 23%, San Francisco, CA - 42% Transportation 15-29% Fairfield, CT - 15% Durhan, NC - 29% Food 14-22% Sacramenot, CA- 14% Jacks0n, MS - 22% Child Care Medical 10-16% Other 8-14% 2 adults both working, 1 child Housing+utilities 15-41% Boston, MA- 15%, San Francisco, CA - 41% Transportation 15-24% Fairfield, CT- 15% Jackson, MS - 24% Food 12-21% Boston, MA - 12% Jackson, MS - 21% Child Care % Medical % Other %
Source: Living Wage Calculator - Introduction to the Living Wage Calculator | MIT

By Age - Generational Table: Source: Generational Table |, 2014

Lifetime Earnings: - Pay by age

This shows that at age 39 a woman's salary is $60,000/year, 88% higher than it was at age 22, $31,900/year.
A man's salary at age 48 is $95,000/year, 130% higher than it was at age 22, $40,800/yr.
Source: Do Men Really Earn More Than Women? - Infographic - (2012)
Ref: For people with college or graduate degrees.
There are several reasons. There are more men in higher paying jobs, software developer, construction project manager. While there are more women in jobs like elementary school teacher, Human resources manager.
For those in the same job categories pay is closer. The male software developer median, annual salary is $65,700, which is 4 percent more than the median female value of $63,300.
Women also take off more time for children after the age of 30.

Source: Survey of Consumer Finances (SCF)
Mean income is about twice the median because of very high income families.
See mean income.
See also Changes in Family Income after 2008 recession.

Percentage of families holding specific types of assets:
Age Stock holdings,
direct or indirect
Vehicles Primary
Other residential
2007 2013 2007 2013 2007 2013 2007 2013
45-54 63.1% 54.9% 90.3% 92.5% 77.3% 63.7% 15.7% 10.1%
55-64 60.8% 57.2% 92.2% 95.6% 81.0% 80.6% 20.8% 16.1%
65-74 53.1% 49.2% 90.6% 96.4% 85.5% 88.6% 18.5% 25.2%
Source: Behind the Numbers: The dismal state of consumer finances in 2013| Deloitte University Press

See Net Worth by age on the Retirement planning page.

Saving vs Spending by life stage:

In Stein-DeMuth's "Yes, You Can Get A Financial Life!", they list the following saving stages.
This will give you something to think about when doing a long range budget.

Figure 7.3: Recommended Annual Contributions to our Withdrawls from Savings for One-Child, Median-Income Family to Maintain an Even Lifestyle when Buying a House.

They say you would spend most of your savings on a house at age 35, then start saving for retirement. They will bump up retirement savings at age 50 when kids are gone.
In a email to me, DeMuth said the above assumed that Social Security was going to provide a significant part of your retirement income so you could put off savings.
See more at savings.

5 Ways to Simplify Your Budget -
Home Budget Spreadsheet with charts and graphs | SimplePlanning $16
10 Free Budget Spreadsheets for 2015
Household Spending

Create an emergency fund
Most people It should be 3-6 months of your expenses (More or less depending on your employment stability). e.g. if your expenses are $5,000/mo you should have $15-$30,000 in your emergency fund.
Emergencies are things like loosing a job, medical or dental expenses, break downs (car, Air Conditioning, appliances, computer, ...), travel for a family funeral, a tree falls on your house, ....
Some typical costs (very rough gestimate):
Item                    When      

Auto timing belt/chain 100,000 mi  $300-$1,000
Auto CV boot           50-60,000  $150-$600
Household appliances    10-15 yrs  $250-$700  Refrig. $350-$2,000
Air Conditioner         12-15 yrs    $5,000
Furnace                 15-20 yrs    $4,000
Asphalt Shingles        20-25 yrs   $12,000
Dental crown                         $800 - $1,400
Dental Implant                     $2,000 - $6,000
Average Life Span of Homes, Appliances, and Mechanicals
It is important to keep this emergency fund in a place that will fairly liquid so that you can get to the money quickly in the event of an emergency. You don't want to have this money tied into stocks or mutual funds because the volatility of the market could cause you to lose money over the short-term.
Start with a savings account, then move to something that will give you a little more interest, money market accounts or certificate of deposits (CDs).
See Why You Need an Emergency Fund |

See What Counts as a Financial 'Emergency'? | See also Economics at Best Places to Live

ESPlanner Inc.
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Household Spending Data (from and other sources)
Living Wage Calculator - Introduction to the Living Wage Calculator | MIT
Cost of Living 2nd Quarter
Cost of Living in Best Places to Live
Retirement Medical Service Costs

last updated 15 Oct 2015