4/17/2024 0 Comments Household budgeting percentages![]() Annual medial costs will largely depend on the size and the health concerns of the family. Secondary budgetary considerations, such as medical expenses, transportation and recreational spending, are more difficult to gauge. Alternatively, families with a higher income should find that the percentage of their household budget devoted to necessities is lower, and that more money is available for savings, personal expenses and charitable donations. Families with a limited income will find that their monthly and annual household necessities take up a large portion of their budget, and there will likely be less money left over for savings and discretionary spending. Depending on income, the percentage of the budget set aside for a family's necessities may be higher or lower. Necessities, like housing, utilities, food and clothing, typically make up the bulk of the family budget and are easier to plan for. This free tool will help you to see where your money is going, and how you can save for the future. But creating a family budget can be made easier with the Budget Planning Calculator. ![]() How much is spent each month on transportation? How much on clothing, health care, recreation, and charitable donations? And more importantly, how much money can be devoted to savings for that inevitable rainy day? Each of these factors makes creating a monthly budget frustrating and often confusing, and when we extend that over the course of a year the tension really mounts. But other financial concerns also shape the family budget. Most people have a fairly good handle on the necessities, and are well aware of the monthly costs of their rent or house payment, their utilities, and even their food costs. If you live in Canada’s far north or in a city where homes are very expensive, you may have to cut back more than an average Canadian would in the “Food” or “Housing” categories in order to afford your higher living costs.Creating a workable family budget can be difficult, and it's sometimes hard to know exactly where the money is going. Spending more in one category may mean that you’ll have to cut back in another category to make your budget balance. Life is all about choices, but you can’t choose the maximum amount in all spending categories. These guidelines are only recommended ranges. You may also notice that if you spend the maximum amount in every category, you’ll exceed 100% of your income. It’s important to know there is nothing wrong with exceeding this limit as long as your budget balances (your expenses don’t exceed your income). However, if you happen to have young children in daycare, have high education costs, take nice vacations, tithe, or have hobbies or recreational interests that aren’t cheap, you’ll quickly exceed the suggested maximum for this category. The guidelines suggest you spend 5 – 10% of your income in this category. ![]() The category in these guidelines that people will most commonly exceed is the “Personal & Discretionary” expense category. Don’t rely on credit for these unexpected expenses. You’re allocating some money towards savings (savings are absolutely necessary for life’s many unexpected expenses.You’re not spending more than you earn, and.If finances aren’t strained in your household, you can choose to be more relaxed and go beyond the guidelines in areas as long as you’re careful to do two things: These guidelines have been created for someone who really needs to put together a tight budget. How to View These Budgeting Guidelines to Get a Hold of Your Spending Habits
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