Aggressive Budgeting

So last week I wrote about how grocery shoppingwas a good exercise in learning how to stick to a budget. This week I want to talk about aggressive budgeting and how to set up a budget that works for you. I had very limited exposure to budgeting, only one teacher took the time to spell it out for me-but even still no one ever attached a dollar amount to how much I should be spending on things. What is normal? What isn’t? What is a healthy amount, or better yet, what amount could I afford and be consistent with? These questions ran through my mind among the others: “Why does Murray like my boyfriend more than me?”, and “Why am I addicted to peanut butter?”.

Budgeting Basics

Learnvest in their “Basics of Budgeting” presentation (which I thoroughly recommend you check out if you need something a little more interactive) suggests you break your monthly income (after-taxes) and divide it up percentage wise: 50% for fixed expenses (rent, utilities, groceries, insurance, cell phone) 20% for debt repayment and savings (student loans, credit cards, and savings) and 30% for discretionary spending. So for example, if someone takes home 3000.00 per month after taxes their budget should break down a little bit like this:

3000 x .50=1500.00 for fixed expenses

3000 x .20=600.00 for debt/savings

3000 x .30= 900.00 for spending or “fun” money

aggressive budgeting

This doggie cheerleader wants you to BE AGGRESSIVE with your budget. If only my boyfriend would let me dress up our dog.

I get why they said 30% for “fun” money–it’s to keep you from feeling deprived and going insane all over the place with your spending. The less you make, the less 30% actually is. It can get tight, especially say… if you take home only 2000.00 per month (roughly 35,000 per year after taxes) you only have 600 dollars to spend in a month. Still, I think 20% is a little low: between student loans, credit card debt from college, and savings into the “big three” accounts (retirement, emergency fund, long-term savings) 600.00 just doesn’t seem enough to cover it. I suggest and aggressive budgeting approach.

This is how I paid down my credit cards while living in a studio in NYC. It doesn’t matter what bucket the extra money comes from but I put 30% of my income towards my credit cards and had them paid down in about seven months time. It was rough, since I paid nearly 1100.00 in rent the extra 10% came out of my spending money. I think it’s easier to pull 5% from fixed expenses and 5% from discretionary spending. If you do this your budget would look something like this:

3000 x .45=1350.00

3000 x .30=900.00

3000 x .25=750.00

That’s nearly 1000.00 per month towards your debt repayment which is a substantial amount of money. The sooner you get it paid off the sooner you can add more spending money to your monthly budget. I still think you should be saving, but can you imagine how far 900 dollars would go if you didn’t have those bills? I read a lot of personal finance bloggers who only live on 40-50% of their income, which is super impressive. I don’t think my budget model is sustainable over the long term, after all you get older and have a family or a house and your expenses exponentially go up. Living off of 40-50% of your income on a small income is hard. So, while you are still young and single and used to living like a college student I recommend this budget as a way to go. Even if you are older and severely struggling with debt I think you should be paying more than 20%, if you can. 10% extra won’t kill you.

How aggressive are you with your budget? Are you a fan of aggressive budgeting?


  • Anonymous Kayla

    We are super aggressive with our budget – especially with paying off our debt (yay student loans!!). Right now with around a 4,000 take home after taxes, our breakout is 60% Debt Repayment, 22.5% Fixed (Rent/Utilities), 17.5% “Spending” – which for us includes an amalgam of grocercies, eating out, netflix (can’t live without it!), and miscellaneous things around the house. Our minimum debt payments are probably about 20% of our income, so we have the flexibility to adjust that spending if needed – we just are focused on being debt free! It isn’t always easy – we’ve had to get creative, but it works for us!

    • Anonymous Kayla

      Whoops my b – I have more inside scoop I promise!!

    • Emily @ evolvingPF

      Holy crap – your fixed expenses are only $900/mo? My husband and I have the same take-home pay but that’s how much we pay in rent.

  • Anita

    I can’t believe they say 30% for fun money! I can do without a little “fun” in order to pay down some of my debt. Now that’s what I call fun!! :) And who says “fun” has to cost money, get creative!

    • L Bee

      couldn’t agree more! Thanks for commenting, Anita!

  • My Money Design

    Love the dog picture!

    I’m still trying to get to 50% saved, but I’m on my way! I am in full agreement with you that 20% just isn’t going to cut it. And do you really need 30% for “fun”? If you’re serious about your finances, you can still organize them in a way where you can have fun and yet meet your goals in a timely fashion.

    • L Bee

      After having been poor for so long 30% percent seems like so much, glad I’m not the only one! :)

  • Michelle

    I’m so aggressive with my budget, I had to turn in my pom poms for a helmet. I’m now a linebacker (is that an offensive player?…whatever) BE AGGRESSIVE…L BEE BEE AGGRESSIVE!

    • Mrs. Pop @ Planting Our Pennies

      Oh Michelle I am so glad that I’m not the only one that immediately had flashbacks to high school football games when I read the title of this post!

      My cheerleader friends used to teach us all the cheers, “Be aggressive – Be Be aggressive!” “Go Bananas – Go Go Bananas!” Funny, didn’t realize how similar these all were until just now =P

      • L Bee

        I was a cheerleader in high school too. With college football ramping up I couldn’t resist the temptation to throw a little cheerleading into one of my posts. I’m glad someone caught the theme :)

  • Edward

    Although I’m debt-free, I’ve also gone to 30% investments/savings. ..,And oddly, noticed very little change in lifestyle as a result. So, next year I’m going to push toward 40%. (I think this is coming from reading the “Mr. Money Mustache” blog.)

    The money automatically comes out of my account and goes to several places for savings and I don’t even notice it. …And it probably stops lifestyle-creep as a result.

    The Networthify calculator ( has been a real eye-opener. I really do not want to work for the rest of my life. If I have to eventually push to 50% for the result I want, I’m going to do it.

    • L Bee

      See my friend Kayla above-she lives on 50% of her income! I’m so amazed. I definitely think it’s doable, but I’ll probably have to either give up my car or live in a cheaper place.

  • Rebecca

    We are really aggressive. The less money you spend on “fun” stuff, the more you can devote to savings or paying off debt. I love that picture of the dog cheerleader. I’m going to picture that each time I don’t spend money on “fun” but instead pay off bills instead!

    • L Bee

      Yay! I’m so glad people will be visualizing cheerleader puppy into tomorrow. It makes me so happy.

  • WorkSaveLive

    Yeah…I wouldn’t say we really stick to percentages or a plan such as this. After budgeting for years we’ve just found what works and what doesn’t, and after our initial struggles with finances we learned to live contently and be fairly aggressive with our budget. We spend $260/month on groceries (for 2), $70 for entertainment/eating out, and then we each get $60/month for “spending/blow” money. The rest goes to bills, targeted savings, or debt.

    • L Bee

      You guys really only spend 70 dollars on eating out? PER month? For both of you? I could understand if it was per person. How do you do that? Eating out is one of our guiltiest pleasures. Since we only have one day off per week we always eat out for breakfast on Sundays. And usually grab dinner on my “break” Friday nights.

    • Jacob @ iHeartBudgets

      We’re right there with you Jason. $300 for food (including eating out), $60 for date nights, $60 for fun money. It’s worked for us and we still know how to PARTAY!

      30% seems a bit high, but maybe once I’m making the big cheese like a baller I’ll adjust a bit… ;)

  • Jordann @ My Alternate Life

    I would say I’m pretty aggressive with my budget. Here’s the breakdown:

    Debt = 45%
    Savings = 8%
    Fixed Expenses = 15%
    Discretionary Spending (groceries, entertainment, personal care) = 30%

    It’s a little intense, but it’s sustainable for the short term until I get out of debt.

    • L Bee

      How in the world do you keep your fixed expenses so low? I’m jealous?

  • mrsplungedindebt

    Wow. I’d feel guilty about having that much ‘fun’ money with the amount of debt we have! I think we’re so use to not spending money we don’t know any different. I’m currently on Mat leave so our situation will change when I go back to work (ie actually work towards savings) but for now we’re ‘living’ on about 1000/month, this obviously doesn’t include our fixed expenses like mortgage, But we have 1000/month for all our groceries, gas, ‘extra’ debt payments, diapers, eating out/having a life.

  • MoneyAfterGrad

    Currently I’ve got :
    50% fixed expenses
    30% debt repayment
    20% spending

    But I want to eventually increase that to almost 50% debt repayment so I can pay off sometime in the next ten years!! Either that or start making a ton of extra money.

    • MoneyAfterGrad

      Forgot to mention that 50% debt repayment would mean I’d have to find a way to decrease fixed expenses.. obviously I need a bit of money to spend. :P

  • Emily @ evolvingPF

    We are definitely not so aggressive with our savings. Last time I checked we were following the Balanced Money Formula (what you reference – I assume that’s what Learnvest based their article on) at the highest level. But then again, we’re not in debt, so all of our 20% goes to retirement, and I think that’s actually aggressive in terms of that type of savings.

    I have found it very difficult to go above 20% and still live the life we want – and that’s after years of optimization! We just hate having to pass up attending our friends’ weddings because of money so we save a lot for that purpose.

    • L Bee

      I agree-I think 20% of your budget going to retirement is a lot and really aggressive. Unfortunately when you’re in debt that number probably goes down to like 2-5% (depending on your debt) which isn’t a lot but better than nothing.

      I have been trying to live on 20% spending for “fun” stuff for two months now and it is still a bitch of a process. Sometimes I wonder if my lifestyle will ever adjust :(

  • Canadianbudgetbinder

    We are very aggressive with our budget and that is what has helped us to have enough money now in our mid 30’s to pay off our mortgage. I can’t force people to use a budget but I can show them what a budget did for us. We will never look back and we will use a budget for the rest of our lives. Taking control of our finances and knowing our financial health was and always will be key. Cheers Mr.CBB

  • femmefrugality

    I paid some debt I had off fairly quickly…10k in six months. I didn’t do anything for those six months, though. And ate a lot of pasta.

    • L Bee

      We could probably save more money but my boyfriend eats Paleo-lots of meat and veggies. So our grocery budget is still pretty high.

  • Sam

    Great breakdown! Right now I’m trying to be super aggressive to pay off my car before the end of the year. Found you from Kelly & loving your blog so far :)

  • Nurse Frugal

    Aggressive is the perfect word to describe what we are doing with our budget and mortgage payoff….using approximately 60% to pay off our mortgage! It’s the only way to go, I don’t want to drag this on and on for ages….I want to be done yesterday ;)

  • Janna

    We don’t have any debt and live very frugally, so I just subtract our fixed expenses from our dual income to find out what we have left. Most importantly, I have goals for what I want to save each year, so I divide that goal by 12 months, and then I subtract that along with our Mutual Funds and Roth IRA’s. I don’t know what percentage is left, but we have plenty of fun money. People always ask me how we can save so much and probably think that we have no life, but I have never felt restricted and I LOVE not being stressed about money. Yeah we don’t have brand new cars or the fanciest house, but that stuff doesn’t matter to us :)

  • Chelsea

    I love your blog! Just found it through a giveaway and can’t stop reading. I have been really interested in saving lately and my boyfriend and I are doing quite well, but not as good as we could be. I totally agree about “being agressive”, 20% of your income is not enough to save in my opinion. I would say that we save even half of our income, but we also aren’t in our own place so don’t have a lot of expenses…which I think is an optimal time to be saving.