Let's look at the following items, I set a percentage amount for each item and I will break it down to further explain why I allocated that much.
Savings for Emergency and Future Needs - 10%
Savings for Future Investments - 10%
In one of the seminars I attended, one of the most important lessons I learned is the effective allocation of savings. At least twenty percent must be allocated to savings and must be split to two. You need to have savings for future needs and emergencies because you cannot really say what will happen in life, and savings for future investments like stocks, mutual funds, or maybe a business. It should be savings first before anything else!
Budget for Expenses - 55%
Now, a big portion must be allocated for our expenses like food, electricity bills, water, and rent. In most cases, 55% fits just fine.
Education - 5%
Next, we allocate 5% for education like books, seminars and internet (which I consider a source of education). It is important that we educate ourselves in things like personal finance, business and investment. You might also want to pick up some books on computers in case you want to improve your computer literacy or books that are food for the soul like motivational or self help books.
Fun - 10%
There is no need to deprive ourselves of some fun. According to the seminar I attended, you need to have fun or "self" will rebel. The 10% budget I allocate is usually good for me and my wife to watch a movie twice a month and dine on a fine (i.e. cheap) restaurant. Have fun but no too much fun!
Note: The previous two items can be done interchangeably. Which means you can have 5% for fun and 10% for education. Whichever fits your taste.
Charity/Giving Forward - 10%
We still have 10% left... Now, it is important that we learn how to give back. Honestly, I would rather call this "giving forward". According to wikipedia, "A gift or a present is the transfer of something without the expectation of receiving something in return". Giving attracts positive energy.
Now we have 100% of our budget plan. Remember that a budget is a written plan. It is important that you stick with the plan and stay within the boundaries of your budget. You might want to further break this down and translate into more readable figures. Below is a spreadsheet I use every month for every payday to "preview" my month's budget.
How To Budget Spreadsheet
REMEMBER! This only serves as a guideline. There's no guarantee that this will work for you as it did for me. I actually got this template from a friend and made a few adjustments. You may have to make your own adjustments too.