The Budget Couple

We are the Budget Couple. We make a bi-weekly podcast that talks about life, family, and how to afford it. Join us on our budgeting journey as we explore the keys to budgeting, personal finance, and more.

Learn More

Episode 24: Budget by Numbers

We take a look at traditional budgeting recommendations and see how they hold up to our budget.

Show Notes


  • 50% of income on essentials
  • 30% of income on wants
  • 20% of income on savings

How this works for us:

  • 39% of income on essentials
  • 13% of income on wants
  • 47% of income on savings


30% of gross (before taxes) income – came from Brooke Amendment, capped rent for public housing at 25%, Reagan bumped it to 30%

Many articles, sites now say it is outdated – doesn’t take into account student loans and retirement expectations of younger generations

Not very flexible considering the cost of living in some places, other debt you may have, the fact that you probably don’t need to increase your house cost to maintain 30% as your income increases (we’re paying nowhere near 30%)

Dave Ramsey – 25% of take-home pay, 15-year fixed rate

One option is to consider what emergency fund you’re able to maintain – could it sustain you with your housing budget for 3-6 months?


20/4/10 rule – 20% down, 4 =year loan, 10% of gross income (include insurance)

20% of gross income on all car related expense (6% for us)

Price of the car no more than 50% of gross income ($80K, when new $41k, now $20k for us)


4% rule – Find out how much you spend a year and multiply it by 25. Example $40k a year is 1 million. This is the amount that you need to have saved. If you spend 4% or under per year of that money, you will never run out of money in that time frame. Stock market grows 7% a year and inflation is 3% a year, giving you 4% to live on.

Trinity study finds that 100% of people doing this have enough money for 25 years. 96% have enough for 30 years.

Leave a Reply