This summer I wrote a series on budgeting. Now that you are (hopefully) operating beautifully on your system, you should know how to make adjustments when necessary. One of the most frequent questions I get and one of the areas where most people go wrong is in the area of one's budget allocated to living expenses.

Most budgets have determined that the affordable percentage of one's budget allocated for housing expenses is 38%. That means if you bring in $50,000 a year, you should be spending no more than $19,000 or about $1,500 a month in housing expenses. You can do the math. But think about it... there is more to housing expenses than simply owning a home. We also pay for electricity, water, cable, phone, etc. If you added these additional expenses, you will likely climb well beyond the 38% mark. The government determines 38% for the cost of your home alone, but savvy budgeters will strive for 38% of income allocated to all housing expenses.

Obviously, the closer you are to the 38% threshold, the better you fare. Take a glimpse at your budget. What percentage are you?