Somebody - Jorge? - mentioned a book I hadn't heard of, "All Your Worth" by Warren and Tyagi. I found it at my library, and boy is it an eye-opener. I've been through it 3 times so far--Skimmed it while half-asleep, before bed one night. Read through it thoroughly, taking notes, another day. Now I'm using the index to try and find answers to questions I've had while starting to do their calculations. I can definitely second the recommendation that it's a good read.
To sum up, they recommend no more than 50% of your income on must-haves, 20% towards a combination of savings and debt repayment, and 30% on wants. I found a nice little Excel spreadsheet to download that calculates your percentage of Must Haves. It's about 3/4 of the page down, here: http://www.mdmproofing.com/iym/BMF.shtml
Obviously, food is a Must Have. But they say to allocate only a small, basic amount for food in the must-have category, because a lot of what we normally buy is really non-essential, or bought in a form that's more expensive than it needs to be. But they didn't really give much of a guideline, like a percentage of income. So I pulled my food figure from the USDA guidelines for the lowest budget for a 2-person household. You can find guidelines for various budget levels and household sizes here: http://www.usda.gov/cnpp/FoodPlans/Updates/foodnov04.pdf
They include predictable household, medical and transportation costs in Must Haves, but it looks like they mean for emergencies like car repairs and such to be handled out of the 20% savings. So my must-have figure below doesn't count any of the $461 a month we've been hit with recently for various repairs.
Our current Must Haves are at 65.2% of our income. That falls into their Must-Have Crash Zone--the absolute worst category. Their description of our situation is accurate: "Even the smallest hiccup can seem like a major disaster because there is no extra money to handle anything that goes wrong. You shot through the Danger Zone many warning lights ago, and now you are deep in the highest risk area--the Crash Zone."
Now I did figure in a few things that some people wouldn't call Must Haves. DH and I cannot physically mow our own lawn anymore, so I included the expenses for our lawn guy. I also included our Virgin Mobile cell phones, because we both drive old cars, and I drive home from work several nights a week. I'm just not going to put myself in a position where I have to walk to a call-box along a highway at night, where people are driving 65 mph. It's the cheapest cell option I could find, and I consider it a necessity. OTOH, I also included every bit of income we've been getting, such as rebates, cash gifts. Amazon sales, and so forth. So I think overall the 65.2% gives a pretty accurate, if dismal, picture of where we are.
All Your Worth
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