The Basics of Household Budgeting

Whether you are an 18 year old who is finally moving out of your parents’ house or someone who is starting a new life with your partner or probably a young professional who just got her own place, establishing a household budget is an important foundation of your future financial success.  But it’s not that easy, especially for someone new in this “department.” Not unless you’re born with instant money-management skills.  If you want some pointers about building an ideal household budget, keep on reading.


Aside from your mortgage or rent, there are other home expenditures that you need in running your home such as utilities, cleaning products and other household supplies.

US News reports the ideal breakdown of housing expenditures according to the Bureau of Labor Statistics’ Consumer Expenditure Survey which you can see below.

  • 58% for Mortgage
  • 21% for Utilities
  • 2% for Household furnishings and equipment
  • 8% for Household operations (maid/lawn service)
  • 6% Housekeeping supplies

Although utilities are variable and you’re always never sure how much you will be paying for every month, it’s still important that you allocate a certain percentage for that.  For “newbies”, it’s imperative that you track your utilities by creating a spreadsheet so you will be able to see the flow of your utilities and see how and when you need to be smart about your energy usage and habits.

Overall, House-related expenses should take the biggest chunk out of your budget with roughly 60% and that already includes real estate taxes and homeowner’s insurance.


Remember:  Live within your means.  Don’t spend too much for your car and car costs if you aren’t even earning that much.  According to statistics, most Americans spend 17% of their income for transportation which includes car payment, gas, insurance and repairs.  Depending on your distance from your work or school, transportation costs may run as low as 10% or as high as 20%.


In general, it is acceptable to allocate 5-15% of your budget for food and that already includes your groceries and eating out.  BLS reports that the average budget for food in households in America is 12.9%.

Savings, Insurance and Health Care

As hard as it may sound, you should be allocating 5-10% of your budget for this area.  Again, according to The Nest, this is what your breakdown should look like:

  • Life Insurance and Retirement 10%
  • Health Care 6%
  • Casg contributions up to 4%


Oh, the most dangerous of them all.  Personal expenses include shopping, entertainment, recreation… you know what those are.  According to Leave Debt Behind, ideally, you should only be spending 5% for entertainment and recreation.

About Toni Marie

Toni is a regular contributing author on Guest Money Blog. In addition to writing about money topics, she also likes to write about relationships and health.
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