Next, you’ll allocate 30% of your net income to cover your necessary expenses. Many also include home maintenance costs, appliance and furniture repair or replacement costs, and landscaping costs in this category as well – more on this in a bit… Necessary Expenses – 30% If your mortgage payment does not include taxes and insurance, then your property taxes, school taxes, and homeowners (or renter’s) insurance would also be included in your housing expenses. This would include things like your basic house expenses like your mortgage or rent payment. This first bucket will include any expenses pertaining to your housing costs.
The rule of thumb with the 30-30-30-10 method of budgeting is to break out your income into the specific categories as follows: Housing Expenses – 30% In an effort to eliminate any possible confusion, let’s review which types of expenses should be included in each of the four categories. When using this method, you’ll need to make some decisions as to how different bills or expenses will be categorized. How to Allocate Your Money Using the 30-30-30-10 Budget Method However, if you’ve found traditional ways of budgeting to be too confusing or tedious, then the act of allocating your take-home pay into only a handful of categories may be a good way to reduce the overwhelm you feel when budgeting.
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