What Household Budget Survey Is The Typical Percentage Breakdown?

The percentage distribution typical American household budget looks like the list below. For most categories, a number appears. A number of more sensible to help you see where your personal budget single (or is not appropriate.) If your budget does not match the typical American household budget, joy! The average American household budget is jacked - we carry too much debt and we just do not save enough. We are so worried about our neighbor's new pool, our colleague from new cars and designer shoes from our new friend that we spend more than we used to try to stop smoking. But do not worry! Review the percentages below. Compare your household budget, then read on to find out how you can move into the elite minority of Americans who have mastered where their money goes

Typical Household Budget Percentages

• 33-38% Housing (59%-66% of this is on shelter - mortgage interest, property taxes, repairs, and rent, and other items)
• 15-19% Transportation (up to half of this is vehicle purchase - 2 cars per household average)
• 13-14% Food Budget (55% at home, 45% away)
• 0-2% Alcohol
• 0-3% Tobacco and related products
• 0-2% Caffeine related products
• 4-5% On clothing and related services (drycleaning)
• 4.5 - 6% on out of pocket Health Care
• 9% Personal Insurance and Pensions (breakdown: 1% life and other personal insurance, 7.5% Social Security, .5% investment
• 5% Entertainment
• 2.5% Charitable Contributions
• 2% Reading and Education
• 1% Personal Care products and services
• 2% Miscellaneous
• 4% Credit Card, Consumer Loan Interest

If your budget is very similar to the above, this is what we can do to fix this. Not in order. Do not go to the next step until you have dealt with this stage:

1. End #!&*! Credit cards accepted!
2. Make a budget down and dirty right away! Do not worry about the right to be the beginning ... can improve over time. Just do it!
3. Reduce your easy to identify, frivolous spending habits ($ 3 strips, magazines, 450 extra satellite channels, etc.) If you have any expensive habits you've wanted to stop for a while, the time has come. For example, if you're "Chain Smokin ', a strong alcohol, drinking coffee fool, you can harvest a surprisingly up to 7% or more of your income! Just reduced to 2 drinks per day, drink coffee in the house and the cessation of cigarette net you a good amount of extra money and add years to your life! Refine your budget after eliminating what you can.
4. Reduce your 401K investment payments and other (if any) to the minimum allowable to keep your 401K and / or other investment accounts open. If your employer has a plan of action, keep this in addition to the minimum to keep your investment accounts free (but only to the minimum you need to get all the matching funds.) You will get a lot more return on payment of the debt you can reasonably expect to obtain traditional investments. If you pay in a college fund for your children - continue to do so - if you're not and you really want to wait until Step 6. Define your budget to reflect additional revenue, if any.
5. Create an emergency fund equal to 2% of their annual gross income. Should be a little difficult to access (as a separate account or investment funds), but not too difficult (certificate of deposit.) Work within your budget - it is very important. You will not believe the amount of stress that melts in doing so.
6. Pay off your debts - everything except mortgages. And not just move your revolving debt into a second or third mortgage - that is bad. pay with a system of debt fast. Pay off your student loans (for future use, they are a bad idea.) Pay your car (s) too. If you are not up and down on a car loan (the car is better than you), you can sell it and get a cheaper, paid for the car. Take a small (inexpensive but fun) party for you and your family every time you pay a debt.
7. Take all the money that you pocket to pay your mortgage and debts not start putting in those investment accounts put you in slow motion. Make sure you invest at least 10% of your gross income. If you followed steps 1-4 exactly, you should have plenty of breathing space in your budget now. If this is true, and you want to invest more than 10%, go ahead, but remember to reward yourself and live a little. Grow your emergency fund to a level you're comfortable with (two months or more of income is a good start.) If you have small children and want to send them to college, start putting the money into a college fund for your choice for them if you have not already. Take a bigger party than usual when it is done.
8. To pay the mortgage and throw the biggest party yet! You can start this refinancing to a fixed rate mortgage (credit should be in good shape, paid all the debts.) In the case of a mortgage of 30 years, pay more than the monthly fee is considerably lower interest that you give to the bank. If it's 15-year fixed - wow! It 'great!
9. When you are completely debt free, regularly give everything you think you can afford. It's good for the soul!

Easy? No. Worth it? Doing the above dividends in your life in many ways more dollars and cents only. To ensure a dignified retirement and financially stable. To do this well and you can also build a way for your children and grandchildren to enjoy a prosperous life, and they will remember you with love and respect long after you've moved the other side. Now!
And thanx for your nice article Brad Homer and tray your passive income