I have been evaluating my budget based on my income and spending trends to see how I measure up to the recommended budget allocations listed below.

Recommended Budget Allocations:

Housing with insurance 25-35%

Transportation with insurance 10-20%

Food 15% - 20%

Debts 10%

Savings 10%

Recreation 5%

Health Care 5%

Utilities 5%

Others 10-15%

These allocations are based on typical breakdowns I found in a few articles.

Here is a budget worksheet from About.com that I populated in Excel to determine how to best divide my budget.

Here is what I learned:

1. I spend about 37% on housing and 21% on transportation, but that is the price you pay when you live in L.A.
2. It’s important to be honest when evaluating your spending behavior so you get an accurate idea of how to budget your money. I spend a decent amount of money on fun/recreation. It’s never good to completely deprive yourself when you’re trying to be penny-wise, but this is an area where I have to be diligent.
3. I was being to aggressive with my debt pay-off plan. I eased my allocation to debt back to 10% to make room for savings and other necessities. You don’t want to be completely uncomfortable with the budget you put in place or you won’t stick to it. The goal, after all, is to have a good life on a budget.