How much should I spend on food?
What’s a normal amount to spend on clothing?
What do most people spend on vacations? health care? eating out?
These types of questions from readers seem to keep popping up in my inbox.
And I understand why – because I, too, have looked for answers to these questions – especially when I was new to realistic budgeting.
I had no idea where to start — and clearly what I had been doing wasn’t working. So I was hoping that someone else could tell me what to do!
But after almost
five seven years of living on a written budget, I have learned one thing about normal: There is no such thing!
What works for one family, doesn’t work for the next. And if a third family tries to spend that same amount, they may well end up thousands of dollars in credit card debt.
Instead of plugging in a percentage for every item in your budget, you need to determine its amount by asking ourselves two questions:
#1. How much money do I make? Does this item fit within my disposable income?
#2. What are my priorities? Does the amount that I am spending on this item reflect my priorities?
Some of us earn more, some of us earn less, but unless you are a multi-millionaire (in which case, you probably aren’t reading KOAB anyway), you really should be asking yourselves these two questions – often.
And yet, that doesn’t stop us from wondering, even if we have a balanced budget – “Is my spending normal?”
I know I do! I wonder if the $185 we spend most months on gas for our two cars is a lot – or a little. And yes, I will admit that knowing that it costs me less to fill up my van than the national average does comfort me somehow.
(I’d always rather be on the thrifty side of normal.)
Rent / Mortgage – 31.5%
Utilities – 5.4%
Groceries – 8.6% (up from 7% three years ago, but still less than half what it was 25 years ago)
Food at Restaurants – 5.7%
Alcohol – .9%
Clothing & Shoes – 3% (women spend about 1.5 times what men do)
Car Payments – 5.7%
Gasoline – 5.3%
Tuition and childcare – 3%
I was feeling pretty good about our comparative spending until I got to that tuition and childcare line.
What about you? Do you wonder what you “should” be spending?What about that tuition line? Did that 3% feel like a swift kick in the gut?