Web Watch remembers the old adage when we were just starting out to be able to sustain ourselves on our own.
“When you make your budget, you should always devote 1/3 to housing, 1/3 to transportation, and 1/3 for everything else.”
Now, we may not have been able to follow that breakdown exactly, but it’s not necessarily that far from the truth of how AMERICANS ACTUALLY SPEND THEIR PAYCHECK. Especially if you take into account the need for saving some money for retirement or a rainy day, that ratio may be better split into quarters:
“devote 1/4 to housing, 1/4 to transportation, 1/4 put away in the bank/IRA/investments, 1/4 for everything else”
That seems to be closer to the truth. Let’s take a look at how the average 48-year-old spends their average $63,091 annual salary (before taxes):