A Peek Into My Budget: Living on 53% of My Take-Home Pay

I’ve mentioned several times before that I’m incredibly focused on paying off my debt as soon as possible. Today I want to go more into detail on what that looks like on a monthly and yearly basis. My goal in sharing this with you is to show you how I prioritize my spending.
First of all, all the numbers and percentages are based on my take home pay from my full-time job in mental health. My husband and I have separate finances and so my example will likely look differently than your situation.

Nothing helps keep you accountable quite like putting your finances on the internet.

Calculating 53%

I am paid biweekly, totally a magical 26 payments throughout the year. I have several automated savings plans set up to come out of my account as soon as I am paid. First, I have $500 transferred to a different account for my student loan payment. This is typically $1,000 month, with a rare $1,500 month. This totals $13,000 for the year. That’s over 34% of my annual take-home pay and my overall salary.
I also focus on saving a moderate amount of money. With another automated savings plan, I have it set to transfer $50 each week ($2,600 each year). I also contribute 3% of my income to my 401k, and contribute $20 a week to my IRA ($1,040 each year). Altogether, my savings accounts for 12.6% of my annual take-home pay.
If you’re keeping track, my savings and debt payments total 47% of my annual take-home pay.
That leaves me with 53% of my take-home pay for everything else, including other savings goals I have, household necessities, dog food/grooming/vet care, medications, office supplies, cell phone, entertainment… EVERYTHING.
 

How I Do It

I mentioned earlier that my husband and I have split finances, so instead of pooling our money, we keep our money separate and split the bills. I start by making sure all of my bills are paid up front, such as car insurance, home insurance, Netflix, Hulu, Audible, and my cell phone.  That way, I know exactly how much is left over.
After that, I withdrawal $150 every 2 weeks for our grocery budget. We’re not allowed to buy food outside of this month.
I make sure I have at least $150 cushion in my account for gas, commuting to and from work.
Finally, I don’t buy things I don’t need. I’m not saying this to sound preachy or make anyone feel bad. I just don’t buy things that I don’t need to spend money on. Honestly, I already spend plenty of money on monthly bills I don’t need, like Netflix, Hulu, Audible, and Amazon Prime. I justify this because we do not have satellite or cable, and Audible allows both of us to have much more enjoyable commutes to work.
If something comes up, I have an emergency fund to cover it. Otherwise, I’ll add it to my wishlist for a while, come back to it, and see if I still want it. Most of the time, I don’t.
I’m also that person that walks around Walmart for 20 minutes holding the same item and ultimately ends up putting it back on the self. That trick has saved me some money over the years.
 
 

How Its Helped

Since I took the time to calculate my percentages, I’ve been better able to keep my spending in perspective. I know I have 22% of my take-home pay to spend on my “wants” and so I try to remember this when I’m making superfluous purchases. Or some not-so-superfluous purchases.
For instance, I recently purchased a $7 notebook for my blog (don’t judge). At the time, I thought this was an absurd amount of money for a particular item, especially when there are so many less expensive options. However, I knew this was an investment because I’ve used the less expensive options and seen them fall apart in just weeks.  And even though it’s $7, I knew that I would have to make some sort of change to my wants spending to compensate for this purchase, such as not buying lunch one day (this is a serious problem area for me).
 

Takeaway

I hope you take the time to look at your budgeting percentages. If you want more information on general percentage guidelines, check out my post on 50-30-20 budgeting. I hope you take the time to look at your spending habits and examine your financial priorities.
 

Further Reading

If you need further assistance with budgeting, check out my complete guide to creating a successful debt repayment plan.
A Peek Into My Budget: Living on 53%
This post contains affiliate links. Please see my disclosure policy for full details.
 


What is your most important budgeting category?

7 thoughts on “A Peek Into My Budget: Living on 53% of My Take-Home Pay

  1. This motivates me to see what percent of my income I am living off of. It’s great to be able to say you only live on a portion of your take home pay!

  2. Fantastic information here, Michelle! It’s actually pretty inspirational for me. I need to get a much better handle on my budget – I’m a terrible record keeper and my husband isn’t much help with that.

    1. Kelly, I’m so glad you’ve enjoyed it! I want to share what I’ve learned through my years of trying to figure it out on my own. It’s such a huge focus for me because I never really learned how to manage money from my family. I learned a lot about what not to do but I never really learned what to do.

  3. This is a really great post. I too don’t buy things i don’t need. With two children you need to keep a tight reign on things. I find they grow fast enough and keeping them in clothes and food is a battle and a half. I work in a mall, so you would think I would end up shopping like crazy. One tip is to never walk the mall during breaks etc. I go in and out the back door. I don’t need anything so why walk it? I have saved tons this way. Thank you for sharing!

    1. Jen, that is definitely a great tip! I used to work in the mall and it was torture! I’ve cut out “shopping” for entertainment (and by that I mean going to Walmart because there’s hardly anything to do where I live). It feels weird to begin with but after a while you kind of forget that you ever did it.

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