What Is 10-10-80 Budget?

After you tie the knot, one of the first orders of business involves choosing a budget plan for your new household. Though it may not be the ideal plan for every couple, the 10-10-80 budget is a common choice among couples who want to start saving for the future right off the bat.

10-10-80 Budgets

The 10-10-80 budget is built on the premise that a household requires no more than 80 percent of its earnings to live comfortably. Couples who subscribe to this budgeting plan set aside 80 percent of their combined paychecks for food, utilities, rent, clothing and other necessities. The couple gives 10 of the remaining 20 percent to charity, and the rest goes into a savings or investment account for the future.


If you and your spouse earn a combined income of $5,000 per month after taxes, your 10-10-80 budget would be as follows: $4,000 allotted for living expenses. $500 allotted for savings accounts or investments. $500 allotted to give to nonprofit organizations, such as churches or charities. Within the living expenses portion of your budget, you may create additional divisions for rent, utilities, food, transportation, entertainment and any other regular expenses you incur each month. For example, you may allot $2,000 for rent and utilities, $700 for food, $400 for transportation, $200 for entertainment, $100 for medical expenses and the remaining $600 for miscellaneous expenses.


If you have debt, some financial planners recommend paying 10 percent of your monthly income toward your outstanding debts instead of toward investments or savings. Some people also vary the plan's percentages. For example, you may decide to cut down on expenses and live off 70 percent of your monthly income instead of 80. In this case, you could split the remaining 30 percent between charity and savings, thus creating a larger nest egg for your future.

Tax Considerations

Depending on the type of investments you choose, the Internal Revenue Service may require you to pay tax on any investment income you earn. If you contribute a portion of your earnings to nonprofit organizations and you itemize your deductions on your federal tax return, you may qualify to claim a deduction for your donations.


About the Author

Amanda McMullen is a freelancer who has been writing professionally since 2010. She holds a bachelor's degree in mathematics and statistics and a second bachelor's degree in integrated mathematics education.