Percentage wise allocation/budgeting of income for various expenditure

POSTED BY Daredevil13 ON January 5, 2013 9:15 pm COMMENTS (2)

I know budgeting of income varies with individual but would like to know in general on Percentage wise allocation/budgeting of income for various monthly expenditure

2 replies on this article “Percentage wise allocation/budgeting of income for various expenditure”

  1. Credexpert says:

    Dear Daredevil13,

    As rightly mentioned by you, budgeting of income varies with individual. But below are certain budgeting allocations that can be followed in general:
    • Allocate 70% of your net income towards your expenses
    • Always categorise your expenses, like Rent, Utility bills, Loan / Credit cards, Groceries, Medical etc. Categorisation will point out the exact areas where you are spending more in comparison to the rest
    • Allocate balance 30% towards savings
    • Of this 30%, save15% for retirement, 5% for contingencies, 10% towards some investments
    • Set a goal and use these savings for achieving them
    • Maintain and monitor monthly budget sheet


  2. I think no one can comment on others expenses, it is PERSONAL finance after all. There are of course some thumb rules you could follow: save at least 15% of net income for retirement if you are in you are in your 20s EMI for home loan should be less than 30% of net income

    I think one should look at keeping expenses as low as possible I would say 30% of net income. This will leave you enough money for all goals.

    Individual breakups are meaningless information as they highly dependent on the person and their family situation

    expenses are related intimately to investments, savings and liabilities

    If one can save 70% of ones net income for 5-10 years one will have enough money to
    generate enough passive income to stop working or at least work sporadically

    here is a good list of general but related thumb rules

    personally I save 60% of my net income because I keep expenses as low as possible

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