Try to pay only one-third of your monthly income for rent or mortgage expenses. Estimate transportation costs at around a quarter of your take-home pay. This should include car, insurance and gasoline expenses, or train and taxi expenses.
Set aside twenty percent of your monthly income for food costs. This should include take-out, snacks, and coffee. Consider carrying a lunch to work to save money. Buy large, economy size packaging at the grocery store. Divide food among several meals, and then wrap tightly in aluminum foil to freeze for later use.
Figure money for recreation and entertainment. Expect to spend five percent of your monthly income for recreational activities, movies, or sporting events.
Check your math. Use extra money for monthly credit card payments, utility bills not included in your rent payment (cable or satellite TV, and phone), student loan payments, gifts for friends and relatives, or feeding and caring for a pet.
Give yourself a big pat on the back! You’ve now got your budget outline down on paper, and you're ready to follow it!