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Discover tips and tricks on how to save and invest money by Oval Money

It's difficult to know exactly how much of your paycheque should be going on rent, bills, food, and miscellaneous costs. Depending on where you live, the costs of each will vary. However, by looking at statistics from across the country and across different age groups, you can get a clearer idea of what exactly you should be spending each month.

1. Housing

According to the Guardian, Millennials are spending over a third of their post-tax income on housing. Just for comparison, this is three times more than their grandparents did.

The general market advice is that you should not spend more than 28% of your salary on housing (be it a rent or mortgage). This means that, technically, people spending more than 28% of their income on housing are overspending and should move into cheaper accommodation. Whilst not always possible for everyone, it is a useful benchmark figure to keep in mind.

2. Food

According to statistics, the average British family spends £60.60 a week on food shopping. With the average household being 2.4 people, this amounts to just under £30 a head on food per week.

In terms of spending advice, the rule of thumb is to spend what you can afford, but keep in mind the average statistic to keep a handle on whether you are allocating too much or too little of your budget to food costs.

3. Fun

Most financial advisors would recommend you spend between 5-10% of your monthly income on ‘fun stuff’. A study by Eventbrite found that 78% of Millennials would rather spend money on an experience than buy something.

What’s important here is defining ‘fun stuff’. You might file ‘dinner with friends’ under ‘food’ instead of ‘fun’. This may skew your figures a little, making your fun budget smaller than it would otherwise be, and your food budget a little higher than average, so just keep that in mind when you’re drawing up your budget.

4. Transport

Again, the way you budget for this is going to vary depending on why and how often you need transport (ie. commuting to work, or just for the weekend), your access to good public transport links, or your ability to run your own vehicle.

According to the ONS, the average weekly household spend on transport in 2015/16 was £72.70 and for the majority of British regions was the highest expenditure category alongside housing (net), fuel and power. Obviously converting this into a percentage amount of your salary depends on what you earn.

5. Savings

This is always the category that splits opinion. There is no effective ‘one size fits all’ approach. (Although the 50/30/20 rule has become a popular piece of savings advice.)

A report by Aviva found that 1 in 4 families in the UK have less than £95 in savings, which is not ideal. The advice given by the British government’s Money Advice Service doesn’t state a percentage of income for a savings goal, rather they advise that everyone should have “3 months of essential outgoings available”.

There is no hard and fast savings ‘rule’, but in effect; save as much as you possibly can.