Sunday, January 10, 2010

50/30/20

Do you know what this is??  This is how your money SHOULD be budgeted.  I know ours isn't that way and so I am going to rework our budget and try to get it to this formula this year and I encourage you to do the same.  This is researched to be a healthy mix of where your monthly income should be going.  50% to needs, 30% to wants, and 20% to savings.  If you're spending more than 50% on your needs then maybe you're trying to keep up with the Jones' too much and need to cut back a little.  If you are spending more than 30% on wants then maybe you and your family need to indulge a "little" more.  If you are saving LESS than 20% then unfortunatel you are like many other American's and need to bump that up a bit.  Start with a little at a time and don't change everything all at once.  That's a sure fire way to fail at the new budget.

Personally, we were WAY low on the wants and we had money left over according to the nifty calculator that I found online.  Maybe I wasn't as truthful as I thought I was.  It's easy to forget the little things that you spend money on that you don't even realize.  The cappucino I used to get every morning, the tobacco that my hubby chews, the packs of gum that my daughter wants every time we go to the store.  I am sure that you can name a few of those too.

Personally I need to REALLY see where our money is going in order to make this work right.  If you don't know where it's going how can you put it in the right catergory.  A little work here will make  ahuge difference in what your budget "should" look like and what it "actually" looks like. 

I encourage you to spend the next month and track where your expenses are going and see if you are in the 50/30/20 ratio.  Take small steps and maybe make it a goal to be at the 50/30/20 budget by the end of the year.  That's what I am going to do.  Don't seta deadline that you can't meet.  It's better to set one that is reachable than one that is completely out of reach.  It's better to see yourself losing 10 pounds rather than 100.  Our budget should be looked at the same way.

Where does your money go?  Will you take the journey with me this year?  I look forward to hearing what you think :)


1 comment:

Kelly Oldridge said...

Very cool, I read up on this the other day...as I heard it on TV...and couldn't believe I saw 50/30/20 again.

Good Luck! This is something that we're working on as well...luckily, we have no credit cards...but I still have a student loan to pay off :-( Ugggh.

Way to go!