Oprah’s Budget Plan – a useful budgeting guideline

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Oprah, yes, the one and only famous Oprah Winfrey, has made available a lovely budget plan which she calls Oprah’s Debt Diet or Spending Plan Pie Chart.  Its really a nice simple guide of how to start your budget plan.  I found it very useful in coming up with my own budget and used it as my optimal guide for my expenses and spending areas.  Now, Oprah’s plan pie chart is divided into basically 5 spending areas namely:

  1. Housing (35%)
  2. Transportation (15%)
  3. Other Living Expenses (25%)
  4. Debt (15%)
  5. Savings (10%)

As seen below in image.

Oprah’s Budget Pie

A basic percentage guideline for each spending area is also given.  Note that its just a guideline for you to use, so feel free, very free to adjust to your liking and preferences.

The spending plan is quiet straightforward and easy to use and customiseable to your own budgeting plan.  All you have to do is take the spending areas and add items that are specific to you.  Be sure to include all you expenses as this is YOUR budget plan after all.

Housing (35%)

This is for all your housing expenses: includes rent or bond, electricity, household insurance, bond insurance rates and taxes and or levies and maintenance of housing.  Most cases if you have a vehicle, your household insurance is included in your vehicle insurance but this expense should be placed under the transportation spending area.

Transportation (15%)

This is the spending area for but not limited to: vehicle installments, insurance, transportation costs, fuel costs, service costs, toll and/or e-toll fees.

Other living Expenses (25%)

This area is for all your living expenses including groceries, nanny or maid, cell phone airtime, phone contracts, data contracts, grooming (hair, barber costs), clothes, lunch at work … in essence, all your other living expenses.

Debt (15%)

This spending area is your debt repayment area.  These include your study loans, credit card repayments and clothing account repayments.  The clothing repayment item is a tricky item to handle.  Should it be in the living expenses spending area?  Ultimately you have to decide.  For me it’s in the living expenses spending area as I have budgeted to spend let’s say R1000.00 on all clothing store accounts per month.

Savings (10%)

This should be your most important spending area.  The more you are able to save the BETTER!  This spending area is for your savings account and any investments you have.  Don’t know what to do with your savings account money?  Check Step 06:  Save 3 – 6 Months Salary for options with regards to your savings money.

Once you have completed your list, then you must now assign amounts to the list but also taking into consideration the percentage guidelines that have been recommended for each spending area by Oprah’s Budget Plan.  This is the difficult part as you now have to perform a balancing act on your finances.  But wait a minute, I think I lied; actually the difficult part is the sticking to your budget plan once you have assigned the amounts.  At first, it is going to be quite a challenge but as time goes on, you will start getting the hang of budgeting and sticking to it.  Practice always makes perfect – or generally!

Remember, your budget plan is an evolving plan, you are allowed to constantly go back and make adjustments and changes to it as you see fit and in order for you to find your ultimate balance.

In the long run, it is my hope that a budget plan or spending plan becomes an integral part of your life that will enable and help you to keep track of your expenses and assist you in staying within your spending plans – this thus in turn puts you on the path to financial awareness.  Be patient – in the long run, the effort will definitely be worth the time.

Also check our the post Step 01: Draw up a Financial Budget Plan for more tricks or information to help and guide you towards a Budget Plan you can live with.  All the best!!

Click link to download documents:

  1. Simple Budget Template
  2. Oprah’s Budget Pie

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