TRY A SIMPLE BUDGETING PLAN
70% for expenses (You choose if it’s for wants and needs) 10% for tithe and 20% for your goal (paying off debt or savings)
A guide for allocating your dollars using the 70/20/10 Rule:
1. Find out what your Monthly Take Home Pay is. (WHAT ENTERS YOUR BANK ACCOUNT)
Here’s how to find out how much you have for:
Expenses: (take your income and multiply by .70)
Goal: (take your income and multiply by .20)
Tithe: (take your income and multiply by .10)
ALLOW UP TO 70% OF YOUR MONEY TO GO TOWARDS EXPENSES
The way you break this down is totally up to you. The point is that you are telling your money where it’s going, needs or wants.
This section includes but is not limited to:
ALLOW 10% OF YOUR MONEY TO GO TOWARDS GIVING
Ever heard the saying “give and it shall be given unto you”? Well I truly believe this to be true. In my household we do something called Tithing.
A tithe is what we give to our church we attend so that they can make a greater impact in our community. This is a personal belief of ours, but if you do not attend church I still think that giving is vital in a budget.
You can find an organization you love and now you’d be able to support them!
ALLOW 20% OF YOUR MONEY TO GO TOWARDS A GOAL
Start with a priority goal, such as debt payoff.
Now before you start tackling debt, I do think it wise to have a starter emergency fund of at least $1,000. Once you complete this move on to paying debt.
Giving 20% of your income towards debt will allow you to pay off that debt sooner. You of course can put more towards debt, but this is a good starting point.
Once you pay debt off you can move towards saving for an emergency.
An emergency fund is calculated by adding up your monthly expenses and multiplying that by either 3 or 6 months. It can be more than that but it is up to you.
The point is you want to make sure that you have something saved in case a crisis happens in your life.
Here’s how I see it, we are all in one of these season:
1. About to enter a crisis
2. In a crisis
3. Leaving a crisis
The time when you are about to enter a crisis may be years. During that time is when you are to prepare for that storm to come. Because let me tell you, it will come!
Now once you have your savings in place, this is where the fun happens!
You can create new dreams! What is something that you’ve wanted to do?
Vacation trip, house, wedding, the list can go on and on.
You can use this 20% for your goal! It’s your dream, now to live it!
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