Budgets depend on a number of factors, such as where you live, work and how you spend. Although your budget is personal and should reflect your lifestyle and priorities, looking at a typical family budget can give you ideas on how to make yours more effective.
Housing takes up the bulk of a typical family's take-home income. According to the chart on CreditLoan.com, which was derived from information released by the Bureau of Labor Statistics, the average American family spends roughly 34 percent of its income on housing. This includes rent or mortgage payments. Neither the chart nor the Bureau of Labor's report indicates whether that percentage includes basic household expenses, but utilities, repairs, maintenance and supplies are typically included in the housing portion of a family's budget. According to MSN Money's Liz Pulliam Weston, many lenders recommend families spend no more than 28 percent of their gross income on housing, with others capping it at 25 percent and still others 33 percent.
Transportation accounts for almost 16 percent of a family's budget, according to the Bureau of Labor's report. This includes car payments, maintenance, gas, insurance and public transportation. You can cut down on your transportation costs by car pooling, using only one car or opting for a less expensive vehicle.
Insurance and Health Care
Approximately 17 percent of the budget tends to go toward insurance premiums, pensions and health care costs. In most cases, this is one area of a family's budget that can't be trimmed down. If you absolutely must cut down on your expenses, shop around for a better rate on health care or life insurance policies.
Food accounts for nearly 13 percent of the average family's budget, with almost half of that stemming from eating out. Trim your food budget by taking advantage of coupons, sales, eating at home more and packing a lunch and snacks when possible.
Apparel accounts for about 3.5 percent of the average budget, entertainment accounts for about 5.5 percent, and everything else — including credit card payments, gifts, miscellaneous emergencies, education and savings — comes in at about 11 percent. Although this is typical of an American family's budget, your budget may serve you better if you increase your savings and decrease debt and basic living expenses. Set up the direct deposit option offered by your employer so that a portion of your paycheck automatically goes into your savings account.