That these expenses are essential doesn’t mean we can’t reduce them though. This also includes things like child care and child support. The 50% represents the essentials in your budget, expenses like housing, hoa fees, utilities, transportation, parking fees, insurance premiums, and groceries among them. You can certainly just use 50/30/20 as your categories for the most straightforward system ever, but unless you have your finances on 100% lockdown, you probably need to expand out a bit. And to be clear, the numbers you’ll be using are post-tax,so the amount of money you get in your paycheck each month, not how much you earn.
We’re going to break down what expenses fall under each. You allocate your total budget at these percentages.