Some Answers to Your Budgeting Questions

Anytime I drive to a place for the first time, I get directions. Sometimes I do this even if I've been there before. I'm always looking for an easier, quicker way to get from here to there.

The same approach goes for your budget. If you want to know where you're going financially, you need a road map. And just like any trip, there can be several ways to get to your destination. That's why you should update that map periodically.

In a recent column, I provided a set of budgeting principles to help folks get to where they want to be financially. Many readers had questions about the budget percentage guidelines, provided by Money Management International, the operator of a network of nonprofit credit counseling agencies.

One reader asked: "Do you have a guideline for what percentage of income a family should spend on their annual vacation?"

Tom Rehwald from Illinois queried: "Do you have percentages for a retired (retiring) couple who owns their home free and clear?"

F. Christian Thompson of Virginia wanted to know why MMI didn't include how much people should spend on charitable giving.

Others asked: Would you add line items for house repair, tuition, child care and teenage children? Where does a car loan fit in this equation? As a transportation cost or a personal debt?

These are all great questions.

Got kids? Then you need to add a separate category for child care. That expenditure might eat up 10 to 20 percent of your budget. Have a long commute? Then your transportation costs may be more than the 8 percent recommended by MMI. Oh, and a car loan should be included under transportation.

Lynn Hartwig of Massachusetts says her family's travel budget is 8 percent to 10 percent of their annual income.

"Our trips -- perhaps two four-day long weekends (with airfare), one or two mid-winter hotel getaways at local hotels and one 10-day with hotel stay -- make hanging to the budget the rest of the year manageable," Hartwig wrote.

As long as the rest of her budget is balanced, I don't see a problem with vacation expenses taking up that large of a percentage of her family income.