How To Find Balance in Your Finances: Percentage Guidelines

A question our readers frequently ask is how to maintain a healthy balanced lifestyle which includes giving, housing expenses, saving, and still having some money to spend on fun stuff.

The balance depends largely on factors like where you live, if you have small children, if you’re battling a medical condition, etc. Are you a married couple with no kids?  Then you’ll probably spend more on clothing and entertainment than a single mom with 3 kids. Studies have shown that lower income families spend a lot more money on food as a percentage of their overall budget than higher income families. We know that:

  • Spending varies by income level
  • Costs depend on family size
  • Costs also depend on location

So every family and individual is different. There is no perfect combination.

U.S. Average Percentages

Category Percent of Overall Spending
Housing (mortgage/rent, Real estate taxes) 24%
Utilities (water, power, garbage collection, 8%
Food 14%
Clothing 4%
Medical/Healthcare 6%
Donations/Gifts to Charity 4%
Savings and Insurance 9%
Entertainment and Recreation 5%
Transportation (car payments, gas, service) 14%
Personal/Debt Payments/Misc 12%

This is the average based on statistics gathered from the US Bureau of Labor Statistics Consumer Expenditure Survey. Since this is based on what people actually spend and it varies so much by family, location, and other circumstances, I wouldn’t recommend relying on it heavily in forming your family budget categories. Check out this percentage calculator to plug in your numbers and see where your dollar amounts.

A Good Place To Start

Category Percentage of Overall Spending
Housing 25-30%
Utilities 5-10%
Transportation 10-15%
Healthcare 5-10%
Food 5-15%
Investments/Savings 5-10%
Debt Payments 5-10%
Giving 10-100%
Entertainment/Recreation 5-9%
Misc Personal 2-7%

Feeling The Pinch

As Christians, giving is our glorious chance to show God’s love in a tangible way that brings us joy and brings God glory. Letting your giving become an exact percentage every month takes the joy out of it and turns a spiritual thing into another task to check off your list. If you find that you have a little extra to spare in one category, set it aside to be spontaneously and promiscuously generous when the opportunity arises. Never be afraid to overspend in this category.

This is how C.S. Lewis saw it:  “I am afraid the only safe rule is to give more than we can spare…If our charities do not at all pinch or hamper us,… they are too small.  There ought to be things we should like to do and cannot do because our charitable expenditures excludes them.”

Getting It Right

While no budget is the same, it’s important to start somewhere. Start with these guidelines (and that’s all they are) and tweak it to fit your needs. But above all else you must spend only what you bring in, so don’t tweak it too much that you find yourself overspending again. This is where I started and I found that I was able to bring our family food budget down significantly. So I’m sure it’ll help in many areas of your budget as you find you can live on less.

For more help, download our more detailed pdf of percentage guidelines here.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s