#Sample budget plan for single person how to

Other budget approaches to tryīudgeting style is a personal choice. Even so, if you want detailed insight into your spending, this budget may not be your best fit. True, it doesn’t leave much room for spending on special occasions, but it may help you balance multiple savings goals. That can be great if you don’t want to keep up with a detailed plan. The 60/40 rule is easier to follow than some other budgeting options.

If that doesn’t work, bump it up further. For example, try covering committed expenses with 70% of your income. With this in mind, consider modifying the “60%” figure to one that’s more realistic for you. High inflation could put even more strain on your budget. spend more than 30% of their gross income on housing one in four spend half. For many, the cost of housing alone could put this goal out of reach: According to Pew Research, nearly half of renters in the U.S. Holds you accountable for nonessential spendingĭepending on your situation, 60% of your gross income may not be enough to cover your taxes and basic household spending. Recommends earmarking 10% of spending for special occasionsĪllocates 30% to “wants,” including regular and occasional expenses

#Sample budget plan for single person how to

Higher target, guidance on how to divide savings 50/30/20Ĭontrols recurring expenses, regardless of whether they’re “essential”ĭistinguishes between “needs” and “wants” A side-by-side look reveals differences in how these budgets can help you think about money: By the numbers: 60/40 vs. Another popular approach is the 50/30/20 rule, where half your income covers needs, 30% goes to wants, and 20% is for savings. The 60/40 budget isn’t the only strategy that splits income into broad segments. How does the 60/40 rule differ from the 50/30/20 rule? If you’ve met one savings goal (for example, you feel you have enough in your emergency fund), you can start a new goal, like building an investment account. For example, if you have debt to pay off, you could replace one saving category with “debt repayment.” Or, you could shrink all four categories to make room for a fifth. You may need to tweak these categories to suit your situation. 10% “fun money” for activities, trips, or other infrequent splurges.The rest of your income can go to savings goals or spending that falls outside your typical monthly lifestyle. But if you’re a freelancer or contractor who pays estimated taxes each quarter, determine how much to set aside every two weeks to cover them: Because there are 13 weeks in a quarter, divide your quarterly tax payment by 6.5. Keep in mind that if you’re an employee, some committed costs, like taxes and health insurance premiums, might come out of your paycheck automatically. 60% of that-how much you can budget for committed expenses every two weeks-is about $1,380.

Divide your annual salary by 26 or, check your pay stub for the “gross” amount before withholdings.įor example, a $60,000 salary equals about $2,300 for each two-week pay period.To figure out how much you’re allowed to spend during a two-week pay period: The idea is that the 60% portion of your budget reflects “normal” household spending-not special, occasional events like vacations or parties. Also included: regular bills for nonessential items, like streaming services or gym memberships. With this simple budget, 60% of your income (before taxes and other withholdings) goes to fixed expenses, such as:Įven though groceries aren’t a “fixed” expense-food prices fluctuate-they’re part of the 60% because you always have to buy them. In his view, other budgets that track lots of spending categories result in “too much detail and not enough bottom line.” The first 60% To combat what he considered overcomplicated methods, in 2002 financial journalist Richard Jenkins proposed the 60% solution, aka the 60/40 budget.