percent of your take-home pay

Get Out Of Debt Guy: Who is Right About Budgeting Our Money, My Wife Or Myself?

Question: My wife and I fight, or shall I say disagree, all the time about spending and a budget. She has one opinion and I have another. She says we should not spend more than 25 percent of our income on housing but I say 33 percent is alright. Who is right?


Steve Rhode answers…

Steve Rhode on how to get out of debt fast

Jimmy: The reality is you are both wrong and right at the same time.

For years I’ve watched so many personal finance experts write advice about how much people should spend in each category of their lives. I have also watched people fret and worry if they run over those limits.

The reality is that the experts don’t know and just made those rules up. Frankly, they just pulled them out of their butt.

At the end of the day the it isn’t how much you spend for cell phones, cable television, cars or rent. They bottom line is whether you can afford to live within your income, save money, invest some, and enjoy life.

If you want to spend 50 percent on housing and make cuts someplace else, go for it. If you want to spend 20 percent of your take-home pay on your mortgage and go out to eat every night, go for it. I don’t care and it just doesn’t matter.

Most budgets people make are no more than just a page of lies. Unless you are tracking your spending and know how you actually spent your money, you are just guessing how you want to spend your money in the future. Inevitably, when you don’t hit those fixed targets, it creates agitation.


Rather than guess what your financial future will be, develop a spending plan and take a look at how you actually spent in the past month. Once you have reviewed your actual spending, you and your wife can make some educated and informed decisions about how you want to change things for the month ahead. You can learn how to develop an awesome spending plan by downloading my free book, “Eliminate Your Debt Like a Pro” and start reading at page 81.

Now I suspect that your relationship is much like others in that one of you is a saver and one is a spender. Each of us have our own money personality.

Have you ever heard that old adage opposites attract? Well it applies to people with different money personalities as well. Typically, conflicts really flare up between spenders and savers. Spenders feel micromanaged and savers feel insecure without more tucked away.

A healthy financial life is more about balance than about sticking to an arbitrary limit. What I’d wish most for you and your wife is to come to an agreement about what you’d like to save and invest each month and then just enjoy the heck out of the money leftover.

Steve Rhode is the Get Out of Debt Guy. He’s been helping people with personal finance troubles through advice and education since 1994.

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