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Proper Budgeting Makes Life Richer

Finance

Is it difficult to budget your income? There are maintenance, property taxes, utilities and others that due per month. If these things add up 35% on your income, then you are probably at the right track. However if not, maybe it is time for you to sacrifice other categories like savings, debt repayment and vacation. As you all know, budgeting is just like cutting a piece of pie to cater all the eaters. If you want to make sure that you are budgeting properly your income, creating a pie and dividing it is according to your priorities is very ideal. You can divide it into five categories.

 

  • Housing 35%

This part contains monetary contributions that you make for your home. It includes mortgage, water, property tax, electric bill, and maintenance or equipment rentals.

 

  • Transit 15%

This portion goes for the transportation costs that you incur like maintenance, car payments, insurance, gas, transit passes or parking cost.

 

  • Debt 15%

If you don’t have debt then you don’t have any problem. You can allocate this 15% to other sections. Take note that home debts and auto debts are not covered by this section since those are already fixed expenses. This section includes student loan, lines of debt and credit cards.

 

  • Savings 10%

It is very important that you save at least 10% because what if tomorrow you don’t have any more a job? Make sure that you keep yourself secured and protected.

 

  • Life 25%

This portion includes entertainment, food, medical expenses, vacations and technology.

 

This strategy of budgeting will enable you to budget your money accordingly. You will not think about where your income goes because all are already divided.

 

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