People hear the word “budget” and start to panic. Usually, this is because they’re either stressed about their budget or, worse, don’t have one. But I’m going to let you in on a little secret:

Budgeting doesn’t have to be scary. In fact, it can open you up to a more beautiful life of sustainable financial health. Money and time are valuable resources and spending them wisely will make you happier. Budgeting is a great way to lay out your priorities and to help you determine how to spend your money AND time. 

In my book Blue Collar Cash, I talk about the importance of budgeting and offer up guidelines on how to handle your finances. Of course, there’s no “one-size-fits-all” approach with budgeting. But I can assure you that having any plan is better than having no plan at all. 

This breakdown from my friend Dave Ramsey is an excellent place for you to start.

What Your Budget Should Look Like: 

A good budget will look something like this:

Saving – 10%
Food – 10-15%
Utilities – 5-10%
Housing – 25%
Transportation – 10%
Health – 5-10%
Insurance – 10-25%
Recreation – 5-10%
Personal Spending – 5-10%
Miscellaneous – 5-10%

For those who are more visual, this breakdown is one example using the possibilities outlined above.

Now let’s take it a step further and talk about what each of these categories includes.

  • Saving your money for a rainy day is always a good idea. Even putting just 10% of your paycheck aside will add up significantly over time! To be honest, those in high-paying blue collar jobs should be saving more. In fact, check out chapter 7 of Blue Collar Cash (“A Lesson In Time) in which I show how putting just $60/week away can make you a millionaire by the time you retire.
  • Food, utilities, and housing are all essential. But limiting spending in these areas is important to make sure you have enough resources to spread elsewhere.
  • Transportation and insurance will vary from person to person, but it’s still important to allocate enough funds here.  
  • Health, recreation, personal spending, and miscellaneous spending will vary significantly. Some of you may also have student loans to account for, which will change the pie chart percentages, too. But remember that you deserve to have some fun now and then amidst all of your hard work!

One area I like to add: Giving. If you’ve read Blue Collar Cash, you know that I’m a big believer in the power of giving our unique gifts to others. By giving financially, even in small amounts, you are using your ability to spread the wealth with others. And that is no small matter! What you put out into the universe will come back to you, so if you can afford to give of your money, or even of your time, you should!

Of course, everyone has varying needs, and this module should be adjusted accordingly to suit each individual better. However, the bigger picture here is this: When you are disciplined with your money, there is no price on the inner peace and stability it can provide you in your life.

To learn more about budgeting and other important topics, pick up a copy of Blue Collar Cash.