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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.

Food - 10%

I mean, we all gotta eat right?! But even with food being a basic necessity of life, the amount you spend should not exceed more than 10% of your monthly income. As your calculating the math, you may be wondering how you’re only going to spend ‘x’ amount on food per month, well girfriend…. Remember when we discussed cooking at home? Yea… this is where that comes in. Get those groceries girl… even if some days lunch (or dinner) consists of chicken noodle soup or peanut butter and jelly sandwiches. Hey… sometimes a girl’s gotta do what a girl’s gotta do!

Debt - 15%

(Cue the sad music)

Yes, we’re talking about that ugly four-letter word… debt! Sometimes this can be a tricky one if you’re trying to stay within 15% of your income. Perhaps your monthly debt payments are higher than 15% of your net income. Well girlfriend… if that’s the case, this is a situation where you should only be spending the bare minimum (not living in the lap of luxury) until you can dig yourself out of the debt hole. Look, the reality is… if you borrowed it, then you have to pay it back (it sucks, I know). But believe me when I say… there’s no better feeling than not having to owe anyone... anything, so keep paying down that debt!

Savings - 10%

Yea! Savings! My very, very favorite category! You all know how often I talk about the importance of savings and to be honest, I just can’t talk about it enough. If you do not currently have a savings account… I suggest opening one asap. However, if you do happen to have a savings account, but you know you’re not savings nearly as much as you should be… now is definitely the time to start!

Personally, I like to put my savings line item at the top of my spreadsheet so it’s the first thing I see and the first thing I put money towards when I get paid. So go ahead and start chunking 10% into your savings account (but don’t touch it) and see how quickly that thang begins to grow!

Personal - 5% & Clothing - 5% (Optional Categories)

Some people like to set aside a small amount from their budgets to cover personal costs. Like if you happen to be a shopaholic, you can still get your fix by also budgeting in clothing costs to add a few new pieces to your wardrobe each month (or thrifting if you really want to do some damage)… but this is totally a personal preference. These items can also come out of “spending” or “play” money, if you choose not to budget to the last dime.

So, while these percentages are general guidelines… every person’s budget will differ. I would highly recommend doing an assessment of all your expenses and see how your budget percentages align with the percentages discussed in this post.

The best thing you can do is have your percentages be lower than the suggested guidelines… that way you have more wiggle room to get rid of that debt and increase your savings even faster!

You go girl!

Leave a comment and let me know what you think of this post. I’d love to hear from you!

Until Next Time,


Ready to take your life and money to the next level? Schedule a FREE 30-minute consultation call and discover how the GFB Team can help you on your financial freedom journey!


Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

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