Why Cookie Cutter Budgets Don't Work

The CNBC website has a budget calculator that helps you plan a budget. I decided to try it out for laughs. And I did laugh. Where do they get this crap? And what makes them believe this formula will work for everyone.

At the top, I plugged in $2,000 as a nice round number for monthly take home pay. My job is in sales, so we get bonuses based on performance. A bad month can be as low as $1,600 a month. $2,000 is a good month. $2,200 or $2,400 is a really good month.

Here's what I spend versus what CNBC says I should spend.

Housing: CNBC - $600 Actual - $525

This is pretty accurate. Keep in mind, I'm paying bargain basement prices for a neighborhood most of my friends wouldn't live in. (I'm perfectly happy, though.)

Transportation: CNBC - $360 Actual - $230

I'm one of those lucky people with no car payment, so I think I may be overestimating my gasoline. (I included car insurance.)

Debt: CNBC - $200 Actual - $120 (Goal - $0)

Eventually I'll redirect most of this money towards savings. I also pay more for "windfalls" like the $30 I got for my Rainbow Brite Lunchbox and my profit sharing bonus at work. At this rate I'll be debt free in seven months. (Probably sooner, after I get back on eBay.)

Food: CNBC - $280 Actual - $200

This is if I'm really, really good and don't eat out very much.

Household: CNBC - $140 Actual - $280

WTF, CNBC? This is category is basically household bills. Even if I didn't use AC, I'd have to cable and internet to come anywhere close to their estimate. (Call me high maintenance.)

Savings: CNBC - $200 Actual - $50 (Goal - $150)

I'll have more to throw at this when I pay off my debt.

Everything else: CNBC - $220 Actual - $595

Ok, this is where things get interesting. It looks like I have a lot of "free money," but CNBC doesn't account for medical expenses, which for me is about $295 a month for regular medications and doctor appointments. (This is with insurance. And it doesn't even account for the cost of insurance. This is all based on take-home pay, and my job deducts my health insurance.) So we're down to $300 on a good month. On a bad month, it's more like $100.

So NBC says this should be your budget:

Housing – 30%
Transportation – 18%
Debt – 10%
Food – 14%
Household – 7%
Savings – 10%
Everything Else – 11%

But this is what mine looks like in a good month:
Housing - 26.25%
Transportation - 11.5%
Debt - 6%
Food - 10%
Household - 14%
Savings - 2.5%
Medical - 14.75%
Everything Else - 15%

I think I'm doing just fine, despite not fitting in the lines.