What percentage of your paycheck goes to bills?

Determining the amount of money you should put aside really starts with how many expenses you have. It first begins with knowing what your actual income is, not the pretty number on your paystub. I’m talking about that other number that you sigh in disappointment wish you realized, yep, and those are the tax cuts. 

It becomes an income versus expenses. Staring at your paycheck, what should you sacrifice to pay bills?  And, how do you know if you are over budget or under budgeting this category? Let’s go through what is the most recommended percentage of your paycheck that goes to bills. 

There are significant parts that generally divide up your budget. One is the Needs which is your bills Want unnecessary expenses, and Savings. That concept is what generated the 50/30/20 Budgeting Method. If you took a moment to add up all your bills, you might notice it’s always at least half of your income. That is why in this budgeting principle, 50/30/20 is a more straightforward approach.

What percentage of your paycheck goes to bills?

50% of your Paycheck should go to bills (The Needs)

50% should be the maximum of what you take from your paycheck and use for expenses. I would think anything more than that you will feel like your working just to pay bills. This section should be on the necessities.

These are the must-haves: the things you need every month for living expenses. 

Some examples are Rent, Utility bills, Insurance, gas for your car.

To get an accurate idea of how much you are contributing to expenses, review your budget. Go through and separate your expenses by needs and wants. Divide that amount based on your overall monthly income. What percentage did you get? Do you need to cut back?

A good tip I did one month is to track all of my expenses on a spending tracker. I categorized each purchase or transaction as need or want. At the end of the month, I was able to see which side I was overspending.  

When you are on a tight budget, the first category you want to cut back on is the Wants. Mainly this site is easier to trim down. Wants are more leisure expenses, maybe things you enjoy but don’t need it.  

Your living expenses should match your financial situation; if your income is low, keep the want side to an almost minimum. If you find out that all your Needs or bills outweigh the 50%, you should evaluate that. 

  • Are you paying too much for the cost of living? Should you relocate or get a roommate
  • Are you not monitoring the usage of your utilities?
  •  Could you get a cheaper rate on insurance? Health and Auto? 

These are some areas that are still necessities but are not far from overpaying. I went over many ways to cut down expenses in this article:


Everyone’s expenses differ with alot of factors like your living area or your current job. You could have a family that’s growing or had significant financial strife. It’s always essential to go through the must-have bills every month. Always weigh your options by reviewing your budget. I constantly ask myself: Do I NEED this? 

 The point is that you don’t want to extend your expenses any more than 50-60 percent of your paycheck for necessities. That will give your self to able to spend on wants and put money away for savings. No matter what your income level is, you need to put savings away. You can do this by always paying yourself first. If your at the point where saving is still not an option, go through and cut back on both sides: Needs and Wants.

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