What Percent of Money After Bills Go into Saving?

What Percent of Money After Bills Go into Saving?

Written by The Custom Boxes, In Finance, Published On
November 28, 2022
Last modified on December 8th, 2022

Some people are now unemployed and others worry about losing their jobs. Many people also feel out of control with their money, especially due to the rising costs of goods and services.

How do you track exactly how much you spend? A well-balanced budget will help you get control of your finances. You can take things a step further and set budget percentages. Here’s how.

What is a Well-balanced Budget?

Budgets are simply plans for managing your money. It considers your outgoing and incoming funds. Budgeting allows you to see how much money you have, and where it is being spent.

A balanced budget allows you to prioritize your spending and has enough money to pay your monthly expenses. Your ideal budget will be unique and reflect your priorities, values, preferences, and choices. Budgeting helps you save money on a low income.

Why Should You Use Budget Percentages?

If you want to keep track of every dollar earned and how much you allocate to each percentage, you should use budget percentages when creating a balanced budget.

What are the budget categories? The five basic budget categories are savings, housing, and transportation. Consumer debt is included. Monthly living expenses such as groceries or utilities are not included.

How to Set Your Budget Percentages?

Your budget percentages should be set in a way that is most comfortable for you. Budgeting is done according to the popular 50/30/20 rule. This means that people should save 20% of their monthly income. This leaves 50% to spend on necessities like rent or mortgage and the rest for food. The remaining 30% can be used for discretionary expenses. This doesn’t work for everybody.

The 60/40 budgeting option is another option. This method focuses 60% on the expenses that you have committed to each month. These expenses include housing, food, transportation, and insurance. The remaining 40% is used for other monthly recurring expenses such as subscriptions to streaming services and gym memberships. The remaining 40% is divided equally between the four following categories: long-term savings and debt, short-term savings, and retirement savings.

It doesn’t have to be the 50/30/20 budget. How do you break down your budget? These guidelines will help you determine the percentages of your budget.


  • Housing: 25-35%
  • Food: 10-15%
  • Insurance, such as life, medical, home, or auto: 10-25%
  • Transportation or auto services: 10-15%
  • Savings: 15-20%
  • Entertainment and leisure: 5-10%
  • Health: 5-10%
  • Clothing: 5%
  • Personal expenses: 5-10%

These are not recommended budget percentages. They only apply to your monthly savings or spending. You need to find the best allocation for your financial situation. Start by determining your minimum living expenses, before you allocate percentages to nonessential categories.

What Other Expenses are in a Well-planned Budget?

Once you have a rough idea of your monthly budget, you can start to break down the expenses you should include in your budget.

Emergency Expenses

Is it possible to pay for a $1,000 emergency cost without using a credit card? These are just a few examples of situations that an emergency fund might be necessary.

  • Major appliance replacements or repairs
  • Last-minute travel
  • Unexpected tax bills
  • Medical emergencies
  • Car breakdowns
  • Loss of employment

To ensure that you are prepared for unexpected events, keep your emergency savings separate from other savings. Experts recommend that you have an emergency savings account equal to three to six months’ worth of your monthly expenses.

Irregular Expenses

These are bills that are not often but predictable. These include veterinarian bills, online subscriptions, and vehicle registrations.

How Should You Build Your Budget?

Although it is not difficult to create a budget, it can take some time. These are the steps to follow.

1. Calculate Your Monthly Net Pay

Your take-home or net income, also known by your net pay, is your income before deductions for taxes, benefits, and other contributions. It’s basically the money that you use to pay your monthly budget. These are some common deductions taken from your gross salary:

  • Income tax – Federal, state, and local
  • Contributions to Medicare and Social Security
  • Contributions to retirement accounts, such as 401 (k), Roth IRA, and 403(b).
  • Premiums for medical, dental, or other insurance

2. Examine Your Account Statements

To accurately determine your spending, take inventory of all your bank accounts, including savings, checking, and credit card accounts. Using this method, you can determine how much cash you will need each month.

3. Keep Track of Your Expenses

You may know how much money you make, but do you really know where it all goes? You can track both your income and expenses to get the complete picture. Staying on track will be easier with these steps. You can either use an online budget spreadsheet or template or invest in budgeting software that will allow you to track your monthly expenses. 

4. You can Categorize Your Expenses

Begin by grouping expenses in the above categories. Fixed and variable expenses should be considered. Fixed expenses, such as rent or mortgage payments, food, utilities, and food, are more likely to fluctuate from month to month. This allows you to adjust your budget to cover more variable expenses such as travel, healthcare, clothing, and so on.

5. Adapt to Changes

Keep track of your expenses and be ready to adjust as your financial situation changes. To compensate, you may need to transfer money.

It is Good to Know

Be mindful of your savings and spending habits before you break down your budget percentages. You can use tips such as the 50/30/20 Rule to help you narrow down your budget percentages. Money management will be improved as a result.


Keep in mind that your priorities, values, and needs will dictate what you include within your monthly budget. These values will help you make financial decisions about the percentages of your budget. You can save money and still spend confidently by finding the perfect balance in your budget.

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