Rising Housing and Energy Costs Guidelines
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"Rising Housing and Energy Costs Require 
New Budget and Expense Guidelines"

Suggested Budget and Expense Guidelines Below

RELEASE: April  2001
CONTACT: Paul S. Richard, ICFE Executive Director

San Diego, CA. "The average rent for existing and new apartments in much of California has risen to over $1200 a-month and utility costs have more than doubled, which invalidates old budget and expense guidelines," warned Paul S. Richard, executive director of the nonprofit Institute of Consumer Financial Education (ICFE) based in San Diego, CA.

     "The real challenge for CA consumers is to develop a workable spending- plan, a/k/a/ budget, to include both high housing costs and skyrocketing energy prices," said Richard. "Consumers on the lower end of the income scale suffer the most, because a large, disproportionate amount of their incomes, some 80 to 90 percent of their income is now devoted to only two items, housing and energy.  

     Consumers attending budgeting and first time home buyer classes, are advised that in an ideal budget, housing should require only 20 to 30 percent  income and energy should take up four to seven percent.  With today's costs, that means it would take a net income of $4,000 a-month or greater to maintain an ideal budget," Richard said. 

     "Today, an individual or a family in CA, with a $1000 to $1200 a-month income, will see their housing expense use from 70-80 percent and utilities will take another 10-15 percent. That leaves five to 20 percent for food and nothing for all other monthly expenses.  It also means more and more people living together in one apartment or house to keep housing affordable.  Still, others are relying on credit and charge cards, using them for debt on some expenses and emergencies," Richard said.

     "People whose spending may need a little mending in order to come within suggested budget and expense guidelines,  often discover they are paying too much for things because they fail to comparison shop. That, like borrowing to meet regular expenses, is another form of overspending.  It is everyday spending decisions, and especially credit based spending decisions, that will cause severe erosion of one's financial future," Richard pointed out.

For information about "Mending Spending" and monthly budgeting guidelines, visit the ICFE's Web page at: http://www.financial-education-icfe.org. The site also includes helpful sections on increasing savings, using credit wisely, plus "How to set up and implement a spending-plan" (with a one page work sheet) for personal and/or family finances. 

To receive the same information by mail, please send $1 and a
self-addressed, 55 cent stamped envelope to: 

ICFE Money Helps
PO Box 34070
San Diego, CA 92163-4070

Or fill out our request form, stating your interest.

Suggested Budget and Expense Guidelines (for Californians) and others in high rent, high energy cost cities nationwide.

Net Income: $1000 a-month

Category % Of Income Dollar Amount
Housing 70-85% $700-850 a-month
Utilities 10-15% $100-150 a-month
Food 5-20% $50-200 a-month
All Other    

 

Net Income: $1250 a-month

Category % Of Income Dollar Amount
Housing 56-68% $700-850 a-month
Utilities 8-12% $100-150 a-month
Food 15-20% $187-250 a-month
All Other 5-6% $50-75 a-month

 

Net Income: $1500 a-month

Category % Of Income Dollar Amount
Housing 47-56% $700-850 a-month
Utilities 7-10% $100-150 a-month
Food 15-20% $225-300 a-month
Auto/Bus 10-20% $150-300 a-month
Savings 10% $150 a-month
All Other 2-11% $30-165 a-month

 

Net Income: $1750 a-month

Category % Of Income Dollar Amount
Housing 40-48% $700-850 a-month
Utilities 6-12% $100-150 a-month
Food 15-20% $262-350 a-month
Auto/Bus 10-20% $175-350 a-month
Savings 10% $175 a-month
Personal 5-10% $87-175 a-month
Clothing 3-6% $52-104 a-month
All Other 5-15% $87-262 a-month

 

Net Income: $2000 a-month

Category % Of Income Dollar Amount
Housing 40-47% $800-950 a-month
Utilities 6-9% $125-180 a-month
Food 5-20%  $300-400 a-month
Auto/Bus 10-20%  $200-400 a-month
Savings 10-15% $200-300 a-month
Personal 5-10%  $100-200 a-month
Clothing 3-6% $60-120 a-month
Medical 3-12%  $60-240 a-month
Debt Payments 4-18%  $80-360 a-month
All Other 2%   $40 a-month

 

Net Income: $2500 a-month

Category % Of Income Dollar Amount
Housing 32-38% $800-950 a-month
Utilities 5-10%  $125-250 a-month
Food 5-20%  $375-500 a-month
Auto/Bus 10-20%  $250-500 a-month
Savings 10-15%  $250-375 a-month
Personal 5-10%  $125-250 a-month
Clothing 3-6%  $75-150 a-month
Medical 3-12%  $75-$300 a-month
Debt Payments 5-20%  $125-$500 a-month
All Other 4-6% $100-150 a-month

 

Categories

Housing Mortgages, rent, property taxes, repairs & improvements.
Utilities Electric, gas, water, telephone, trash removal.
Food All food items, pet needs, and meals out.
Auto/Bus Lease/purchase and installment payments, gas & oil, repairs, insurance and parking.  The IRS guidelines allow $700 a-month for a car in CA, while public transportation cost average $265. 
Savings Investments
Personal Cable TV, postage, cosmetics, haircuts, club dues, tobacco, etc.
Clothing All clothing purchases, shoes and alterations.
Medical Insurance, prescriptions, doctor and dental expenses.
Debt Payments Credit & charge cards, personal loans, student loans, other debt payments.

To receive the same information by mail, please send $1 and a
self-addressed, 55 cent stamped envelope to: 

ICFE Money Helps
PO Box 34070
San Diego, CA 92163-4070

Or fill out our request form, stating your interests.

For more information contact Paul S. Richard ICFE Executive Director at 619-239-1401.

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