Building a budget is easy enough for most people. Knowing how much money to allocate to each category can be a bit more tedious and complex. Your budget needs to make sense from a financial point of view, while also meeting all your personal needs.

There is no exact way of saying what the “ideal budget breakdown” is for you. After all, every consumer is unique. You earn more than some but not as much as others. The same is true for your expenses.

Of course, there are many estimates that you can follow when building your ideal budget. These estimates have long been used by financial experts, as well as those in the banking and investing industries.

Housing

How much of your income goes towards housing each month? Ideally, this number should be 30 percent or less. This is the figure that most lenders use when figuring out how much of a mortgage to qualify you for. So if you earn $10k per month your budget should not allow for more than $3k in housing expenses.

Taxes

Believe it or not, this is something that many people forget about. If taxes are taken out of your paycheck, which is the case for most people, you don’t have to spend too much time on this. But if you are self-employed it is definitely a portion of your budget that you don’t want to overlook. Generally speaking, 25 percent of your pay should be set aside or taken from each paycheck.

Living and Household Expenses

How much money do you need for living expenses? This differs greatly depending on where you live, your lifestyle, and much more. Living expenses includes your utility bills, car payment, gifts, entertainment money, food, and gasoline. And again, this may only be the tip of the iceberg for you. Your living and household expenses should not exceed 25 percent.

Savings

If you are not saving money there is something wrong with your budget. Most experts agree that saving 15 percent of your income is a good place to start. This can include money that you put into a retirement account such as a 401K or Roth or Traditional IRA. Don’t get in the habit of avoiding the savings cycle so you can put this 15 percent towards other expenses, such as entertainment.

Insurance

The final five percent of your budget should go towards insurance costs. This includes all types of insurance: home, life, car, health, disability, etc.

For most consumers, the above is the ideal budget breakdown. Can you make this budget work based on your income and expenses?