It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for” –Robert Kiyosaki

The other day, I was watching some show on the television and it was mentioned that the rough amount that one should be spending on clothes is 3 or 4% of your total income. I calculated what that amounted to and I felt embarrassed because I spend way more than that, although of late I have not been spending much on clothing, in fact the urge to buy clothing is almost gone!

Anyways, I got the idea to write a post about how to budget your income. The only thing I knew before, is that you should save about 10% of your income but its not clear if that is for retirement, emergency savings or what type of savings, and that about 10% should go to tithe and about a third should go to rent.

Of course allot depends on how much you actually make and if you make enough to spend on discretionary items which should be the last priority. I think that you should try to save whatever and as much as you can but ideally you should save about 30% of your income –  and that 30% should go straight to your balance sheet as an asset never to be touched, so its not saving and then using that to buy a car, fridge or holiday, no! never touch that 30%.

Below is a rough guideline on how you should budget your income:



When they say “pay yourself first” this is what it means – the first thing you should do after getting paid is to write your savings a check of minimum 30% of your income. You can split it anyway that you want – whether its stocks, bonds, savings account etc. The difference between savings and investments is that the 15% savings should be put somewhere very safe and ideally in cash form while the other 15% may be in riskier investments – this you can afford to lose if things go wrong.


About 22-30% of your income should go to housing or mortgage – apparently landlords require you to make 3 times the rent to qualify as a tenant.

Clothing and discretionary categories are highlighted because these are optional in any given month – if your income is still very low, then you might avoid discretionary spending.






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