Living in America

Most Americans DO NOT budget...   Why?

But, in the final analysis, does it really matter why...  the main issue is that they don't.  Maybe they do not know how?  And, that would be a valid reason...  Maybe they have tried and does not feel that it works?  Another valid reason but not sufficient enough to STOP.

Let's look at a simple budget...

$3,300 -  Spouse #1 Monthly Income (After taxes)      
$1,850 -  Spouse #2 Monthly Income (After taxes)
$5,150 -  total income

Monthy Expenses

$1,000 -  Rent/Mortgage
$100 -  Utilities
$100 -  WIFI
$150 -  Online Streaming
$200 - Cell phone
$200 - Car Insurance
$100 - Car Maintenance
$500 -  Car gasoline
$860 -  Food
$500 - Medical Premiums

$200 - Dental

$200 - Eye care

$200 - Clothes
$200 - Life Insurance

$400 -  Vacations (2)

$100 -  Birthdays & Holidays

$4810 - sub-total expenses

NOTE:  after looking at our list and comparing it with our income, we decide to add two more categories:

$200 -  Miscellaneous

$140 - Savings/Investments

$5150 -  total expenses

NOTE:  our total income equals our total expenses which means

 that we are making exactly what we need to make in order to pay our bills and not just survive but still have vacations, holidays, and birthdays like we used to have...

Our miscellaneous category does not just cover any unexplained expenses but gives us a BUFFER $2,400 annually to deal with increasing expenses before they become critical.

We also have another $1680 to add to the paragraph above but my caution would be to never stop a program to save unless you want to increase it...

In other words, I would cut back on clothes, vacations, holidays, and maybe food before I would reduce my savings budget.

This budget is based upon one spouse earning $50,000 annually and the other spouse earning $30,000 annually and a minimum amount of taxes has been calculated which may or may not reflect reality.

I have also looked at expenses that don't occur each month like dental and eye care, and calculated a monthly impact to make sure they were included.

My family unit has no debt which would also influence this budget...  and yes, not only do you calculate a budget but you collect data each month to see how you compare with your budget...  by doing this you can easily make month-to-month corrections to ensure that you stay within your budget...

This type of activity is especially important in today's climate of inflation...  it is easy to get caught off guard if you are not prepared to do your due dilligence.