The Real Budgeting Question
Ask anyone what a budget should contain, and they’ll probably tell you to allocate a certain percentage of your money to a variety of different categories. These categories will probably including housing, transportation, food, savings, entertainment, debt servicing, etc.
That makes sense on the surface, but the problem is that it’s generic advice aimed at “most people” — which means that it doesn’t apply specifically to your situation. Percentage-based budgets often make very little sense if you’re on either end of the income spectrum. People often try to make them fit though, which is a mistake.
The thing is, “What should a budget contain?” is the wrong question to begin with — because the answer to that question is “whatever you want, so long as you’re spending less than you earn.” There is no real “should” about it, because everyone’s life and priorities are different.
A better question might be, “What’s reasonable to spend on various things based on my situation?”
And you’re the only one who can really answer that.
To do so, take a look at where your life is right now and where you want to be in the coming months and years. What are your goals, and what is your current financial situation like? Are you bringing in enough money to meet them, or do you need to cut your budget somewhere or make other adjustments? What will your financial situation will be like in the future if you stay on your current path?
Once you’ve done some thinking, prioritize and go from there in creating your budget.