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If you have 6 kids you want to send to college, you need to put more in the “other savings” category. The “perfect” pie chart I showed above may not be exactly perfect for you depending on your current situation and future goals. Download the pie chart table Analyze your expensesĮveryone’s pie chart will be slightly different. Fill in the chart with colored pencils or markers, filling in parts of the 10 sections to represent the categories that make up more than or less than 10%. Draw four lines in each half to create 10 sections. Draw a large circle and divide it in half. This converts your expenses in each category to a percentage. For each category, divide that amount by your total income, then multiply by 100. If you want to make your own pie chart by hand, do your best to break down your income into each of the above categories.

To use Excel, you can download the Perfect Pie Chart worksheet and enter the appropriate numbers. You can use Excel to create a pie chart or you can make one by hand. Risk management (life, auto, health, liability and any other): 9%Īs you can see, only about 20% of your pre-tax income should be used for everyday expenses! This includes things like bills, food, clothing and entertainment.Housing (including rent or mortgage payments, taxes and insurance): 28% or less.

He then used a pie chart to show what the average person’s income breakdown should look like: When I took a financial planning class, my professor gave us some common metrics to use to assess our clients’ financial situation. But perhaps the most important thing you can do to change your financial situation is to properly distribute your income between them saving and spending. Your financial health depends on a number of factors – your income and expenses, assets and liabilities, and future spending goals/plans. So, today I want to look at spending in a slightly different way – with the help of a pie chart.

But if you’re a visual person, it can be a little harder for you to stay on top of your finances. This makes budgeting and tracking my expenses easy for me. I see things in numbers, proportions and percentages.