Friday, October 1, 2010

10% -10% - 10%

{I don't claim to be a financial guru, so humor me here...}

So I think an appetizing goal would be to put 10% into retirement, 10% into charitable contributions, and 10% into general savings. Doesn't that sound nice? Wouldn't you feel great if you could pull that off?

Let's break down the numbers...

Paycheck deductions: 38%
Federal Taxes: 16%
CA Tax: 5%
Medicare/Social Security/Disability: 9%
Medical, Dental, Vision, and Life Insurance (varies for everyone): 8%

Retirement: 10%

Charitable Contributions: 10%

Savings: 10%

Rent/Mortgage: 25%

Groceries, Gas, Car Repairs, Student Loan Payments, Cell Phones, Internet, Kids, Spending Cash for entertainment/fun/clothes: 7%???

Ummmmm...Is there seriously anyone who can pull that off? Could you pull that off?

On a related note, I found this U.S. Consumer Expenditures breakdown from the U.S. Department of Labor. Taxes and savings aren't included, so I'm assuming this is only percentages of net income expenditures as opposed to allocation of income. Even so, it's interesting.

34.1% on housing
17.6% on transportation
12.4% on food
10.8% on insurance/pensions/social security
5.7% on healthcare
5.4% on entertainment (Same amount as health care?? I find that interesting.)
3.8% on apparel and services
3.7% on cash contributions
1.9% on education
1.6% on miscellaneous
1.2% on personal care
0.9% on alcohol
0.7% on tabacco
0.2% on reading

(Click image to enlarge)


Kim said...

Before we moved to our rental house which costs us $500/month more than our last place, we were able to save and tithe this much. !0% retirement, 10% savings, 10% tithing (well, and a little more in fast offerings). But. . .things are different now. We still put that much into retirement and tithing but our personal savings rate is very, very sad. Very sad. Oh well, hopefully someday we'll be able to save more again.

Kerri said...

It sure is helpful to see where the money goes in rates of percentages. Can identify what is really important; the "We really spend 10% of our annual income on DRY CLEANING" conversation might have someone rethink their shopping experience, though the 5% ice cream budget...that's staying.