Ask Kim: Tackling “Realistic” Budgets

Dear Kim, 

Everyone is jumping on the budgeting and financial planning bandwagon and I wanted to ask you what is a realistic budget for a single woman? I always hear that you need to spend a percentage of your check on rent/house payment, then food, and then put a percentage into your savings but there is so much more when it comes to everyday living. There are rising gas prices, food prices are even increasing, and now the housing market is a nightmare. Realistically, what does a good financial budget truly look like? It’s scary to sit down and start to even think about finances and where the money is truly going. Please help! 


Budgeting Betty 

Dear Betty,

That’s a hard question. There are so many different answers and they depend on where you are in life, and where do you want to be down the road. I know times are a little scary right now, with the uncertainty surrounding inflation and even what’s going on with the stock markets, so coming up with a workable budget can be daunting.  A general rule of thumb to begin with might be  the 50/30/20 budget. 50% of your income is spent on necessary living expenses, like your housing, food, utilities and the like; 30% toward wants like eating out, entertainment and all the extras in your life, and 20% for saving. If you’re saving for a house, you might lower the 30% for wants and put more into your savings account. The numbers are just a guideline, and everyone’s situation is different. The best advice I can offer is to sit down and see exactly where you are financially. Look at all your expenses, even down to what you need monthly for clothing and personal care. Decide realistically what you might be able to take out of your expenses, and go from there. Be sure to include that portion that goes to savings. I took my dog to the vet this week and the bill was over $200. Sometimes it’s hard to budget for those kind of expenses, and that’s where your emergency fund comes in. My son just had to buy a new refrigerator for the house they purchased in September of last year. They didn’t expect to have to replace a major appliance so soon, but again, that’s where your savings come into play. There are creative ways to lower your expenses besides giving up your daily latte, maybe you could have a roommate that would help pay your rent/mortgage and utilities. My youngest is living with a couple other guys and he really wants to move out on his own. He just doesn’t quite have the income to make that a reality.  He’s saving toward a down payment on a house and has even gone so far as to meet with a mortgage banker to see what he might qualify for.

Vogi Berra once said ‘If you don’t know where you’re going, you’ll end up somewhere else’. I love that because it’s true in so many areas of life. It’s certainly true of your budget. Living month to month without a plan likely won’t get you where you want to be financially. 



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