How to Save Money – The 60-40 Rule

How To Save Money - The 60-40 Rule

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 as well as in a conversation which has a colleague, I found out a simple system in which my colleague has been using for years.

How To Save Money - The 60-40 Rule

The Rule (60%)

How To Save Money - The 60-40 Rule

The 60/40 rule simply says of 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:

How To Save Money - The 60-40 Rule

• Basic food as well as clothing needs.

• Rent or Mortgage

• Utilities (electricity, water, internet, cable subscription etc.)

• Insurance premiums.

• Charitable contributions.

• Taxes.

How To Save Money - The 60-40 Rule

the item looks simple enough nevertheless in my experience putting all committed expenses into 60% of my income was a tough thing to do. nevertheless don’t give up as the item can be very possible to achieve This particular.

How To Save Money - The 60-40 Rule

The Rule (40%)

How To Save Money - The 60-40 Rule

The some other half of the equation can be the 40% which can be divided into four 10% categories.

How To Save Money - The 60-40 Rule

• 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 of which This particular category applies to your whole family such as dining out, a day within the mall shopping, your hobbies etc. nevertheless also remember of 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 of which you cannot afford? can be the item worth the item 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 of which you don’t actually 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?

How to Save Money – The 60-40 Rule

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