What is a Healthy Budget?

[laurannm]

Now that we have been discharged and closed for a few months, we finally seem to have a firm grasp on our budget. After all bills are paid we find that we have around $700 or so left over for "play money" every month (family of five)

What is considered to be a "healthy budget"?

[justbroke]

It varies so much by individual circumstances, I can't really say.

if you are putting away and maximizing 401(k) (401(b) and other plans) contributions during the year, and still have 10% or more of your gross income left at the end of the month... that's good.

You would create a rainy day or Christmas or Vacation savings account and save even more.

I use to spend all my disposable income on entertainment. I don't do that anymore. However, you do need to enjoy yourself... go out every so often (once a week), but be level headed about it.

[HHM]

Well, if you have $700 left over, I would not view it as "play money". that should go straight into an IRA, Annuity, or Whole Life Policy for retirement.

Does your current budget include some entertainment expense?

[Trixie007]

I think a healthy budget is one that includes a line item for everything that you spend money on.

Besides the regular bills:
retirement
emergency fund (3-6 mos of expenses)
auto repair fund
auto replacement fund (cash)
out of pocket medical
christmas
vacation
clothing
personal care/grooming
blow money
dining/entertainment
furniture/appliance replacement
set aside money monthly for any irregular bills
home repair fund
pet care
fund for any big items you want to save up for

One of my post-BK goals (in addition to the above) is to also have one months worth of all expenses in the bank account so it doesn't matter when pay-day is vs. when specific bills are due.

If you still have any money left after all that, you could just send it to me...

[Never_Again]

Definitely do not view the $700 as "play money!"

Before I invested in retirement, I would make certain that my emergency fund is in place. That will do wonders to keep you out of trouble in the future.

Also, if everything is accouted for, then you are in good shape!

[Flamingo]

Since you are just out of BK, credit is going to be hard to come by and if there is a major car repair that needs to be done, or if you have a house and the roof starts leaking or the water heater or other major appliance goes, I highly suggest you put the majority of that away for those sort of expenses because you just won't be able to whip out a credit card or cash advance check to cover those expenses. One car repair can easily come close to $1,000 if it involves something major and not covered by any warranty.