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How To Spend And Save Your Money: A Guide To Dividing Your Paycheck.

Hey girl, hey!


So if you follow Girlfriend’s, Budget posts regularly… you may notice that the chart below looks a little familiar. If so, that’s because I mentioned it briefly in my 4 Reasons Why Keeping Up with the Joneses is for the Birds post as a tool that my readers could use to determine if they are overspending in certain areas.


In today’s post, I would like to go a little more in depth about this chart and discuss what each category actually entails. So without further ado… Let’s chat!

Before reading any further… if you don’t know what your monthly net income is… meaning the total amount you actually receive on your check(s) per month… stop right now and grab that information. It’s going to help as we start breaking down numbers for each category so let’s get ready to do some math, girlfriends!



Housing - 35%

The housing category is basically the total amount you pay each month for the place where you lay your head. So in addition to rent or mortgage, this category would also include renters insurance if you live in an apartment, or if you own a home, you would include property insurance as well as any HOA fees you may be responsible for on a monthly or annual basis. With all that being said, the amount you pay for all of these expenses should not exceed more than 35% percent of what you make in monthly net income.


In order to determine what amount you should be spending on housing, take your monthly net income and multiply it by .35. Whatever amount you get… that’s around the amount you should be spending in total for housing. If you’re paying way more than that amount… you might want to reconsider your living situation.



Transportation - 15%

Although there are many different modes of transportation these days, expenses to be considered in this category are items such as bus fare, taxi (or Uber) fare, car note, care insurance, fuel, toll, and parking expenses.


So whether you commute to work everyday or take public transportation, the amount you spend on transportation per month should not exceed more than 15% of your monthly net income. How much are you spending on transportation? Try doing the calculation now.



Utilities - 5%

The utilities category includes bills such as cell phone, internet (and/or cable), and electricity (and/or gas). The sum of these item shouldn’t exceed more than 5% of your monthly net income. The good thing about this category is that many of these items are somewhat controllable.


For instance, if you live in a place where the winters are no so brutal, you can opt to not always turn on the heat and just bundle up with an electric blanket or a space heater. On the flip side, if you live in a place where the summers may not be as sweltering as some other places, you can choose to lift the windows for a little fresh air instead of running the A/C. Doing some things just a little differently can help save you hundreds in the long run. Trust me!


Not only that… most people don’t absolutely need the internet (maybe… if you work from home) but I do know that no one is in dire need of cable, for sure. If these items don’t fit into your budget, there are many bookstores or coffee shops that have free internet you can use when you need it and there are a variety of cheaper alternatives to cable like Netflix or Hulu.


If the amount you’re spending on utilities exceeds 5% of your monthly income… I definitely suggest trying to find ways to scale back your budget in this area.