8 Responses for "What is a good rule of thumb in budgeting your personal finances?"

1. murphy51024 July 24th, 2008 at 10:51 am 1

   It depends how much you earn, but a realistic target should be around 25%

2. Tom July 25th, 2008 at 7:19 pm 2

   Be realistic with yourself; a mortgage is a big investment over a long period of time.. if you can live within your means you’re doing well!

3. dukefan86 July 27th, 2008 at 4:03 am 3

   Factor in how much you’ve saved for a downpayment and your emergency fund. Pay off as much debt as you can before buying a home, you’ll be glad you did!

4. cpowers21 July 30th, 2008 at 4:00 am 4

   35% Housing
   - Mortgage/Rent
   - Repairs
   - Taxes
   - Utilities
   - Insurance

   15% Transportation
   - Car Payments
   - Gas
   - Insurance
   - Repairs
   - Parking/Tolls
   - Train/Bus Fees

   25% Other Living Expenses
   - Eating out
   - Vacations
   - Entertainment
   - Clothing

   15% Debt
   - Student loans
   - Credit Cards
   - Personal Loans

   10% Savings

   That’s the reccommended break down for all your finances. But it isn’t the limits the mortgage lenders will figure. They generally figure your mortgage/insurance to be any where between 30% – 48% of your monthly income. Depends on your credit and such. It would be best to talk to some lenders and get a pre approval amount.

5. Rainy July 31st, 2008 at 6:53 pm 5

   when I was saving up to buy my first home, before I was married I could barely save 8% after I married we committed 25% of our income to saving for a home(we felt it was more important than going out ) with in 2 years we were living in that home. by applying the savings to our mortgage after the purchase we paid off our home in only 8 yrs.

6. boston857 August 3rd, 2008 at 9:49 pm 6

   10% – conservative savings plan to be used towards new home etc

   10% – agressive investment plan towards retirement.

   80% – consumed and applied towards living expenses including rent, credit card debt, student loans, auto loan, etc…

7. KitKat August 5th, 2008 at 12:59 am 7

   First rule of thumb is that mortgage payments should be no more then what you take home in 2 weeks. I could not tell you what should be left over because those installment payements can vary greatly from person to person.

   Go to a mortgage calculator online and fill it out and it will tell you what you can afford.

8. Drew August 5th, 2008 at 4:38 am 8

   cpoers21 has a text book answer. What i try to due, is save 25% 25% on housing no debit 25 % other investments and 25% to play. This is on my net do ask about taxes you i would have a lot more. Also i give away about 10% usually out of good investments and the play money.

   Believe it or not the 10% is probably the most importing.