Budgets are a part of personal financial planning and therefore, they are a personal decision.  Of course there are standardized rules to budget planning, but if our income doesn’t support our budget then what are we working towards?

A personal budget depends on our personal income.  We need to live within our means, and spend less than we earn.  If we have more coming in, than we have going out we will always be saving.  It is a standard rule in the financial world that we should save 10% of our annual income; and we should have three months of savings in our rainy day account for emergency purposes. However, our income may not support a standardized savings habit.

We need to adjust our spending to our income. Do you spend the standardized (suggested) 35% of your income on your housing and 15% on transportation? If you live in a large metropolis city, I imagine that your housing costs may be higher than someone who lives in a rural area. Therefore once again the standardized budget will not fit with our personal income.

Personal budgets should not be about standardized percentages, they should be about our income. We should pay our bills on time, enjoy our money, and save the rest.  If only it were that simple!

Think about your spending last month. How much did you spend on housing, transportation, and food? Now think about the month before last month.  Did you spend the same amount on housing, transportation, and food? There are some essential monthly expenses that need to be fixed and constant every month.  If our income is fixed then our expenses should also be fixed.

In my opinion housing, transportation, and food are my most important monthly expense; because if I don’t have somewhere to sleep, if I can’t get to work, and if I don’t have food in my belly, then nothing else really matters. 

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