NEW YORK – Put 20% down when buying a home. Don’t spend more than 30% of your income on housing costs. Keep child care expenses below 10% of your annual household income.

These money rules of thumb can be useful guardrails, helping you allocate spending and determine what’s affordable. They can also be incredibly defeating when they feel unattainable.

If money “rules” feel completely detached from your reality, know this: The average American doesn’t come close to hitting many of the popular money rules. And that’s OK.

“If you treat ‘rules of thumb’ as rigid rules, you’re setting yourself up for frustration,” says William O’Donnell, president of Heartland Financial Solutions in Bellevue, Nebraska. “The thing people tend to forget is that guidelines are flexible because everybody’s situation is different.”

What’s important is having a handle on your expenses and building a spending plan that works for you, not some ideal. Here’s how to view money rules of thumb in the context of your own personal financial reality.

The rule: Divide your budget into needs (50%), wants (30%) and savings (20%).

The reality: Housing alone can easily eat up half of your take-home pay.

The 50/30/20 rule is a popular budgeting framework that divvies up after-tax income into three buckets: needs, wants and savings. But must-pay expenses can bust that budget before you even get started.

In 2020, for example, 23% of American renters spent half or more of their income on rent alone, according to the most recent data available from the U.S. Census Bureau. Add in other needs – utilities, groceries, transportation, insurance, child care and debt payments – and there’s little, if anything, left over for wants or savings.

Don’t scrap your budget if the buckets don’t work. Instead, embrace the principle and adjust the framework to fit your current financial situation with an eye toward where you’d like to be long-term. Sure, it may be more of an 85/10/5 budget now, but over time you can move closer to your ideal balance.

Simply tracking all of your expenses is a good start; you’ll see where every dollar is going and can make more informed decisions about your spending.

The rule: Don’t spend more than 7% of your household income on child care.

The reality: Most families spend 20% or more on child care.

The U.S. Department of Health and Human Services considers spending more than 7% of your annual household income on child care unaffordable. But a whopping 51% of parents spend more than 20%, according to a 2022 survey from Care.com, which interviewed more than 3,000 parents paying for child care.

There are few things you can do to dramatically cut child care costs, and discounts and scholarships may be available, depending on your state and child care situation.

A dependent care flexible spending account is another option. If your employer offers it, you can contribute up to $5,000 pretax and use the funds to help pay for a nanny, day care, after-school care and summer camp registration, among other things.

The rule: You need a 20% down payment to buy a house.

The reality: First-time homebuyers typically put around 7% down, according to data from the National Association of Realtors.

The 20% down payment “rule” is an outdated one, says Jessica Lautz, vice president of demographics and behavioral insights at the National Association of Realtors. Yes, lenders once required such a substantial down payment, but they now rely on private mortgage insurance, or PMI, to mitigate their own risk, passing on the cost to borrowers.

Homebuyers who put less than 20% down pay, on average, 0.58% to 1.86% of the original loan amount per year for PMI, according to Genworth Mortgage Insurance, Ginnie Mae and the Urban Institute. That can add hundreds of dollars to your monthly mortgage payment.

Putting in more money upfront lowers the monthly and overall cost of your mortgage, but emptying your savings to buy a home can leave you on shaky financial ground.

Roughly 3 in 10 homeowners (29%) no longer felt financially secure after purchasing their current home, according to a 2020 survey conducted by The Harris Poll for NerdWallet. That feeling was most acute among younger homeowners, with 42% of millennial and 54% of Generation Z homeowners feeling financially insecure after purchasing their home, compared with 31% of Generation X and 16% of baby boomer homeowners.

A mortgage broker can run the numbers to help you figure out the sweet spot for your down payment, but you also need to ask yourself a few questions, Lautz says.

“Do you need money in savings to remodel once you are in the home, or backup savings for other expenses?” she says. “Would a lower monthly mortgage payment be easier for other monthly expenses such as student debt or child care?”

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission. This column was provided to The Associated Press by the personal finance website NerdWallet. Kelsey Sheehy is a writer at NerdWallet.