The beginning of the year is the perfect time to take a look at your household budget. It may be time to make a few tweaks to what you are allocating for expenses. If you don’t have a budget down on paper, the team at Broussard Poché, LLP suggests you start the new year with a pen and paper (or a spreadsheet if you’re computer savvy). Actually seeing your expenses can shed new light on your financial situation.
Let’s break it down with the following categories:
Try to keep each of the expenses of maintaining your home around 30% of your total budget. Of that 30% break it down this way:
- Mortgage: 55%
- Utilities: 25%
- Household Services, for example lawn care, maid service, repair: 15%
- Various Supplies, for example cleaning supplies: 5%
The total portion of your vehicle and transportation costs should stay under 10% of your total budget. This should include:
- Monthly Payment
- Regular Expected Maintenance
Most Americans allocated about 12% of their budget to this category, but we live in Louisiana so let’s go with 15%. This should include groceries and eating out in a restaurant.
This one is tricky, some people set aside almost nothing for the unexpected but we suggest you aim for 20% of your paycheck. This could eventually help your family from living just paycheck to paycheck.
The rest of your monthly income may come in handy if you work less hours for one month or for saving up for a special vacation, etc. You may want to consider investment opportunities once you really get ahead. The point is, you have more financial freedom if you make a budget and stick to it.