Managing Your Take Home Pay Effectively

Are you managing your take home pay as well as you could be?Ever wondered if you could be doing a better job managing your take home pay? Did you know you are working with after tax dollars when you are dealing with take home pay?

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Many budgeting software programs only show us what we are spending, very few actually tell us what we should be spending because there are no hard and fast rules that fit everyone's situation. We are all different. We require different percentages of our take home pay in different areas depending on where we live, how much debt we owe, if we are supporting dependents, all of these factors will contribute to what our individual budget should look like.

Some credit and debt specialists suggest the following guidelines(remember these are only a guide):

Housing Expenses which include:

rent (condo fees), mortgage (first, second, etc.), house insurance, property taxes, utilities, cable, satellite, telephone, housing maintenance 30 - 35%

Living Expenses which include:

food, automobile expenses (insurance, fuel, lease payment, repairs and maintenance) medical expenses, child support or alimony payments, life insurance, prescriptions, vitamins, pets,retirement savings, Co-signed debt or other secured types of debt, miscellaneous 40 -45%

Work Expenses which include:

Gas / travel, lunch, coffee breaks, Child Care, work clothing, parking

these expenses may be captured under Living or Personal Expenses, if not, they would be additional to those areas

Personal Expenses:

Smoking, drugs, alcohol, Entertainment, Recreation, Child care, barber, hairdresser, gifts, donations, tuition, school expenses(kids), extra curricular activities (kids), allowances (kids)
bank service charges, and anything else 8 - 10%

Debt Repayment Less than 20%

When you break your expenses down by category you get a much clearer picture of where your money is going.

If any of your categories require a higher percentage than what is listed, it means you must reduce and use a lower percentage of your take home pay in another category.

You only have so much coming in every pay day and that is what you are trying to use to live and manage within those means.