A Simpler Way to Save: The 60% Solution..!
Mr. Richard Jenkins at MSN Money has developed what he
believes is a simpler way to save. Fed up with budgets that were a burden to
implement, Mr. Richard Jenkins came up with his own easy method to determine
how much should go where each month.
What you are trying to do with a budget is to prevent
overspending, which ultimately leads to piling up debt. Contrary to the way
most people budget, however, it rarely matters what you’re overspending on
-dining out, entertainment, clothes. Who cares? It’s still debt, right?
Mr. Richard Jenkins proposes that your budget divide
gross monthly income as follows:
60% to Committed Expenses like income taxes, clothing,
basic living expenses, insurance premium, charity (including tithe), and
regular bills (including things such as cable).
10% - Retirement.
10% - Irregular Expenses like vacations, major repair
bills, new appliances, etc.
10% - Long-Term Savings / Debt — money set aside for car
purchases, home renovations, or / to pay down substantial debt loads.
10% - Fun Money to be used for dining out, hobbies,
indulgences, etc...
Mr. Richard Jenkins believes that the best way to relieve
money pressure is to reduce Committed Expenses: cut the cable TV, spend less on
clothing, reduce your housing expense.
For a lot of people, part of the difficulty in reducing
committed expenses comes from the need to make big monthly credit card
payments. If you’re carrying a substantial amount of non-mortgage debt, I had
suggest using the 20% that would otherwise go to retirement & long-term
saving to aggressively pay down your debt. But, only after you cut up those
cards.
His advice is excellent.
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