The Best Budgeting Category Percentages

When you start budgeting, you might ask; What’s the right amount to spend on groceries? What about clothes/makeup? What are the best budgeting category percentages?

So many questions, so many answers, let’s stick with the basics. Because in the end, your budget SHOULD BE BASIC. If your budget starts getting complicated, you’re doing something wrong. You don’t need a complicated budget to successfully manage and save money.

You might hear that you should spend 15% on groceries or 10% on entertainment but I’ll start with this.

First, there is no right number when it comes to a specific category (food, clothes, entertainment, etc.). The number depends on how much money you make and how much you want to save each month.

That being said, I want to guide you to make sure you are saving enough and not spending more than you have to.

When creating a budget, you’ll have three main buckets:

  • Fixed Expenses – the payments you have to make every month (rent/mortgage, utilities, car insurance, cell phone, etc.).
  • Savings – how much you want to put towards your emergency fund, investing, paying off debt, etc.
  • Variable Expenses – how much you spend on categories you have 100% control over like groceries, clothes, going out, tv subscriptions, etc.

I recommend the following percentages for each bucket:

If your fixed expenses are less than 50%, put that money towards savings or variable expenses.

No more than 50% of your income should go towards fixed expenses. Let’s say you make $2,000 a month, you should not spend more than $1,000 on fixed expenses. If your fixed expenses are less than 50% of your income, even better. You will have more towards savings or variable expenses.

To understand what percentage of your income goes towards fixed expenses, follow these 5 simple steps to budgeting success.

One last thing on main bucket budgeting percentages. If you find that you can’t save 20% of your income. Although I encourage you to try, give up other things if you have to. It’s okay to start with a smaller number, how does 15% sound? How much money would you save a month if you saved 15% of your income?

Let’s continue with what categories are part of the three main budgeting buckets.

Fixed Expenses

Your fixed expenses are bills that you have to pay every month. This includes your; mortgage/rent, utilities, car insurance, gas/transportation, cell phone, student loans, credit card debt balance, etc.

I include student loans and credit card debt as a fixed expense. If you have student loans and/or credit card debt, treat it as a fixed expense. Don’t just pay the minimum balance. You have to pay more than the minimum balance to get out of debt ASAP.

For the most part (or at least in the short term) you can’t change your fixed expenses. So when it comes to assigning a percentage to your fixed expenses, it will be set for you.

If your fixed expenses are more than 50% of your total spending. Try your best to reduce those bills. If you can’t immediately change them. Then spend less on variable expense.

Fixed Expenses Categories

  • Mortgage / Rent
  • HOA Fees
  • Utilities
  • Car Insurance
  • Gas / Transportation
  • Cell Phone
  • Student Loans
  • Credit Card Debt


Savings is the part that most people get wrong.

They save what they have leftover (if any at all) after paying their bills and buying what they usually do (food, entertainment, clothes, etc.).

I’ll be honest, I started with this “strategy”. During the seven years that I saved more than $100,000. I didn’t have a set budget. What helped is that I’ve always been frugal and really good at saving. HOWEVER, once I did create a budget, I knew that I could have saved so much more.

I realized this when I was moving into my first apartment. I had accumulated so much junk that instead of wasting money on I could have saved and put towards my down payment. It’s okay to mistakes, that’s how we learn.

What’s the secret to successfully saving?

Committing a specific percentage of your income and sticking with it. Month after month!

I recommend saving 20%. That 20% will go towards your investments ONLY.

Follow this strategy if you have a year’s worth of expenses (fixed and variable) in cash. Sometimes called an “Emergency Fund”. You never know what can happen.

As I said, most people only save whatever money they have leftover.

You will be different. You will be ahead of the rest. You will choose to save 20% (more if you can) and the rest will be for your variable expenses.

Variable Expenses

Variable expenses are the bills you control.

You chose (for the most part) how much you spend on your new pair or shoes, if you subscribe to Netflix, and if you buy the latest iPhone.

Because our spending can get out of control quickly. I recommend you simplify. When you think about your variable expense categories, think of only the below six categories.

Variable Expenses Categories

  1. Groceries
  2. Personal Care
  3. Home / Laundry
  4. Clothes / Makeup
  5. Going Out
  6. Miscellaneous

Here’s what’s included in each variable expense category:

You still have money for your Netflix subscription if you want it. You can still buy that new purse. You can be flexible. You just have to commit that only 30% of your spending will go towards these categories. And remember you control these categories so you can do it 🙂


I’m dedicating an entire section to groceries.

Groceries and eating out is the third-largest expense for most Americans. We spend thousands and thousands of dollars a year on food and the big revelation? We.don’t.have.too!

Think of the last time you actually ate all of the groceries you bought? Think of the last time you had to throw away food because it expired? Was it quicker to answer the second question?

When I moved into my first apartment. I started tracking how much I was spending on groceries and I was shocked. I was spending on average between $300-$400 a month. During that same time, “I never had anything to eat.”

When I realized I was spending too much money on food. I knew I needed to give myself a budget. I started with a $50/week grocery budget. The $50 was fine and I had more than enough food.

However, I came across someone on YouTube who was spending $35/week on groceries and I was hooked. That’s been my budget ever since. The key to sticking to that budget is PLANNING.

So when it comes to how much money you should spend on groceries. I encourage you to start with a number you think is too small. I want you to see how far that can get you and try your best to stick to it.

Do whatever you can to keep this number small. If you have no idea where to start, I challenge you to start with a $35/week grocery budget. This is $35/week per person so if you live with someone else, that will be $70/week on groceries.

One last thing, the $35/week grocery budget does not include eating out. Eating out is included in the going out category. Eating is essential but when you choose to eat out it’s because you want to not because you have to.

Budgeting Percentages

If you follow the 50/20/30 rule you will be in great shape. In the end, our goal is to save money. We are saving for our future; vacation, home, retirement, big purchase, whatever it may be.

Here’s a summary of the three main budgeting buckets and the percentages for each.

Remember that once your budget gets hard to manage or it starts to feel overwhelming, you’re doing something wrong.

Stick with the above three main budgeting categories and don’t forget to save the same percentage each month!

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