A Balanced Household
Last issue, we started out the new year with some steps to financial fitness.
We looked at four key questions to evaluate your overall financial health.
The first question was, how much money do you need to support your preferred lifestyle? No matter what that number is here are some general guidelines to help you balance your household budget.
Approximately 30% of your household income should be set aside for housing.
Approximately 20% of your household income should be set aside for transportation. Keep in mind, where you live will factor into this considerably.
Approximately 15% of your household income should be set aside for food. This one can vary on the size of your family and their eating habits.
Show me the money. The first step is to know where the money is going. Keep track of these three areas - housing, transportation, and food. Total each areas up at the end of the month. After a couple of months, do a reality check and see what percentage of your household income was spent on each area.
Food is likely going to be the one area where spending is much higher. It is also one of the areas that households can make some considerable gains in terms of their financial health. In our next issue of balance we’ll introduce some common ways to budget for your monthly food expenses.