WHERE DOES YOUR MONEY GO: THE IMPORTANCE OF BUDGETING
THURSDAY, JUNE 6, 2013

Do you know where your money goes? According to many experts, an ideal personal budget breaks expenses up as follows.

Debt and housing (credit cards, vehicles, rent, mortgage) 30 percent of income

Savings (retirement, savings accounts, investments) 15 percent of income

Insurance (health, car, life) 4 percent of insurance

Living expenses (utilities, food, fuel, clothing, entertainment) 26 percent of income

Taxes (property, sales, income tax) 25 percent of income

According to experts, anytime you have extra funds in any area, you should put it toward debt or savings.

Average household spending for 2011 saw families spending

34 percent on housing

50 percent on living expenses like travel, food, clothing, and other

7 percent on health care

10 percent on insurance and savings

Managing money better can increase your enjoyment of life. Cut costs by:

Using coupons and shopping sales
Reduce unnecessary purchases
Limit entertainment to a certain amount of money every month
Stop eating out
Opt for generic over name brand
Repurpose old items instead of making new purchases
Taking control of personal finance means you are more likely to afford:

A new home or car in the future
A family vacation
Retirement at an appropriate age
Educational opportunities for you or your children
Necessary medical care
Occasional splurges on luxury items
Create a Personal Budget in 5 Easy Steps

Record all of your income and spending for a month
Determine if spending is below income and make appropriate changes if it isn’t
Write down all bills and necessary payments for the next month
Use money after bills and necessary payments to create maximum spending amounts in areas of entertainment, food, gas, and other. Make sure to include savings.
Try to live within the budget for a month. Repeat each month.
http://cgi.money.cnn.com/tools/budget101/budget_101.jsp

http://www.rita.dot.gov/bts/publications/pocket_guide_to_transportation/2013/economic_competitiveness/figure_04_02

http://www.bankrate.com/finance/financial-literacy/secrets-to-creating-a-budget-1.aspx

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