Budgeting According To Your Income – Living Within Your Means in Houston

One of the hardest things for many people to do is budgeting and living within their means. At the beginning of the New Year many of us make the same resolution and tell ourselves we are going to save or “be smart with our money” but never do it. Just know it’s never too late to start and plan a budget.

After doing some research we came with a simple percentage guideline of how much of your monthly net-income (income after taxes) should be spent on certain things every month.


If you look at the image below you can find two scenarios that can serve as examples. The example on the left is for a 22-year-old recent college grad named Molly with a monthly take-home income of $2,250. The example on the right is for a married couple named Jim and Pam who are in their 40’s with two children and who have a combined monthly take-home income of $8,750.


If you happen to be single and are paying for your own expenses, you can use Molly’s scenario and calculate how much of your monthly income you should be spending on certain expenses. Of course everyone’s situation is different and you might not have loans to pay off or a gym membership but you can still use these examples as guidelines for your monthly budget. Let’s use a specific example: If you look at Molly’s monthly expenses, you can see that she spends no more than 35% of her monthly income on rent and takes 8% of her monthly income and puts it towards her savings. If you happen to be spending way more than that on rent or not saving at all, we recommend you follow these guidelines. All of Molly’s expenses and savings still leave her with 36% ($800) of her income to play with. That’s not too bad if you ask us. Use these percentages and apply them to your monthly budget and you will be good to go.

Jim & Pam

If your situation closer relates to that of Jim and Pam you can look at how much you or your family makes a month and apply their percentages. Just like it was mentioned with Molly’s situation, you might have different expenses than Jim and Pam but its good to use them as suggestions for your monthly budget. About 22% of your monthly income should go towards your mortgage and about 15% percent should go into a savings account for whatever future plans you might have. Having an emergency fund is always a good thing. As you can see they put about 6% of their income towards it. This fund can be used incase of any unforeseen problems such as a broke down car or hospital trip or something like that. One of the biggest expenses you can see is what percentage they out into their children’s college fund. About 16% of ones monthly income is the recommended amount that should be placed into a college fund for ones children.

As mentioned before, everyone’s scenario is different, but what’s important in the graphic below is the percentages per expense. We hope this has helped and it can get you on the road to budgeting according to your income! Look below!


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