How to Save Money – The 60-40 Rule
- March 16, 2017
- Posted by: marlenedubois
- Category: Home Health Aide Training
I have been living on the 60/40 budgeting rule for more than three years today. I had read on This particular subject in a magazine article as well as in a conversation using 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 in which 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 as well as clothing needs.
• Rent or Mortgage
• Utilities (electricity, water, internet, cable subscription etc.)
• Insurance premiums.
• Charitable contributions.
This particular 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 This particular can be very possible to achieve This particular.
The Rule (40%)
The some other half of the equation can be the 40% which can be 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, completely new appliances, etc.
• Fun money: The great part! Do anything you want with This particular money! Just be sure in which This particular category applies to your whole family such as dining out, a day from the mall shopping, your hobbies etc. although also remember in which having fun with your friends, children as well as family does not have to be costly!
What to Ask Yourself
• Are you renting a place or have a mortgage in which you cannot afford? can be This particular worth This particular 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 can be the fuel consumption of your car?
• Do you have too many paid subscriptions in which you don’t genuinely use? (Satellite TV, club memberships etc.)
• What can be 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?