I found this technique a great roadmap for successful budgeting.
1. Pay yourself 10% of your take home pay. It would be wise to use a separate checking account and debit card for this 10% which includes your “play money”, dining out, extra-curricular activities or you can put away 5% for that special piece of jewelry.
2. Give away 10%; this could be your tithe, charitable contributions or any particular cause you are interesting in.
3. Save 10% of your take home pay each month; this should be outside of your 401K or retirement saving, but can be part of your emergency fund. Can also include saving for vacation, investments, business start-up money, savings for a special purchase/occasion.
4. The 70% of your income is the lifeline of your budget and should be managed very strategically so that you can make sure the 30% happens. Everyday living expenses include:
- Car payments
- Student loans
- Personal loans
- Credit cards
- Cell phone