I read an interesting article in USAA Mag recently, “Budgets Are The New Black,” and I thought it did a great job of breaking down budgets by percentages (plus, what a killer headline!).

It was written by famed money guru & best-selling author Jean Chatzky, and among other things pimped out an excellent graph of where all our money should be going. Or, at least where we should strive for it to go! You see a lot of recommended graphs & lists out there (which are pretty much the same), but this one really stood out. And not just because of the pretty pictures either ;) If you’re looking for a great benchmark, this could be the one for you.

According to Chatzky, our NET income should break down like this:

• Housing: 35% This includes not just your rent or mortgage, but utilities, maintenance, taxes and insurance.
• Transportation: 15%. Again, not just your car loan, but the money to pay for gas, parking and upkeep, as well as any taxis or public transportation.
• Other debt repayment: 15% Not your mortgage or car loan, but student loans, credit cards or other debts.
• Savings: 10% Non-negotiable (includes retirement contributions)
• Life: 25% This is everything else. Your clothing, travel, health care, food, fun.

Pretty simple (and safe) stuff. By following these guidelines you’re pretty much guaranteed to live a more financially secure life. And, there’s only one other rule she adds here: Borrowing is allowed, but NOT from savings. You can take money from one bucket to use in another (say, for paying mortgages that are higher than the average because of where you live), but you’ve got to leave savings alone. I REALLY like that idea. Imagine if you ALWAYS saved 10% of your income no matter what? We’d be sitting a lot more prettier, that’s for sure. So if you haven’t started already, get to saving buster!

And here’s how J. Money’s NET income breaks down:

By the way, this isn’t necessarily a recommendation of mine, just the way it is right now. Also keep in mind it’s pretty rough as I had to single out my own portion of the money & bills from the Mrs’ since we have them all combined (you could see our breakdown from Jan, ’09 here though). Being the curious cat I am, I really just wanted to see how I’d compare alone going by the same guidelines above.

• Housing: 42% ($1900) – Washington D.C. costs substantially more than the country’s average, but I’d still like this number to drop more (more than the 37% in our combined breakdown too). It’s the one area of my financial life that really screws with me.
• Transportation: 9% ($400) – Most of this is due to train/metro costs since I barely drive, but it does include things like insurance and gas and all. Gotta love zero car payments though!
• Other debt repayment: 0% ($0) – I have no more consumer debt, leaving me with a plethora of extra money here :)
• Savings: 29% ($1,300) – Since the mortgages are “all” we have left, on top of paying less in transportation, there’s a lot left over to be saved! Of course, I could be using this money to aggressively pay them down and all too, but instead I’m squirreling it away until this economy (and my job) becomes safer. Since it’s kept pretty liquid, I could always apply it against the mortgages at any time anyways.
• Life: 20% ($900) – Not too bad in the % game here, but it could def. use some work. I’d say at least $200 of this goes to stuff I can’t even account for, but I do like having this cushion of “not worrying” here. I can’t be hardcore with *every* dollar I bring in, I’d go crazy!

I think it’s great to compare your finances to a chart like Jean’s every now and then. Not only does it put things in perspective (on top of it being fun running the numbers if you’re a nerd like me!) , but it helps give you the confidence to keep working towards your goals. Or, at the very least, highlight some problem areas to work on!

Not everyone’s situations are the same, but it’s important to have guidelines to measure up to. And if you think Jean’s breakdown purely sucks, then create your own! Just keep working on it and be sure to check back every so often to track your progress (I try for every 6 months).

So, do you know how YOUR income get distributed? And if so, are you happy with it?