How to Save Money – The 60-40 Rule
- March 21, 2017
- Posted by: marlenedubois
- Category: Home Health Aide Training
I have been living on the 60/40 budgeting rule for more than three years right now. I had read on This particular subject in a magazine article in addition to in a conversation having a colleague, I found out a simple system in which my colleague has been using for years.
The Rule (60%)
The 60/40 rule simply says that will 60% of your gross income should go to Committed or Fixed expenses. These expenses are your Overhead expenses, meaning the basic things you need to pay to survive. They include:
• Basic food in addition to clothing needs.
• Rent or Mortgage
• Utilities (electricity, water, internet, cable subscription etc.)
• Insurance premiums.
• Charitable contributions.
the idea looks simple enough although in my experience putting all committed expenses into 60% of my income was a tough thing to do. although don’t give up as the idea is usually very possible to achieve This particular.
The Rule (40%)
The additional half of the equation is usually the 40% which is usually divided into four 10% categories.
• Retirement: Money set aside into your IRA or 401(k) plans.
• Long-term savings: Money set aside for car purchases, major home repairs, or to pay down debts such as credit cards, mortgages, etc.
• Irregular expenses: Vacations, car repairs, fresh appliances, etc.
• Fun money: The great part! Do anything you want with This particular money! Just be sure that will This particular category applies to your whole family such as dining out, a day inside mall shopping, your hobbies etc. although also remember that will having fun with your friends, children in addition to family does not have to be costly!
What to Ask Yourself
• Are you renting a place or have a mortgage that will you cannot afford? is usually the idea worth the idea move to a smaller place or farther place to save up? How much money will you save if you do so?
• Are your car payments too high? How is usually the fuel consumption of your car?
• Do you have too many paid subscriptions that will you don’t genuinely use? (Satellite TV, club memberships etc.)
• What is usually your lifestyle like? How much do you spend in a week, eating out, going on trips etc?
• Do you wear designer clothes? Where do you shop?
• Can you afford to get your coffee or lunch at a cheaper place?