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60% Solution
60% - Committed expenses:
Basic food and clothing needs
Essential household expenses
Insurance premiums
Charitable contributions
All bills -- even non-essentials such as satellite TV service
ALL taxes
10% - Retirement Savings
10% - Long-term Savings or Debt Repayment
10% - Short-term Savings for Irregular Expenses
10% - Fun/Personal Money
Here is how I stack up today against the 60% solution.
*** With the employer match, the total retirement contribution is 10%.
Note: Edited to include current minimum payments on my cc/heloc and student loans as committed expenses.
7 comments:
Nice work. I wish I could be that disclipined. I usually start off ok in the begining of the month, but then I start to spend. :)
With your amount of debt you're doing really well to have your committed expenses at the 69% level. I doubt I'll be able to do that when I finish law school.
Actually, the committed expenses aren't taking into account my student loans which is the bulk of my debt load. The majority of them (private loans) don't go into repayment until 4/1/08.
With those taken into account, I am well over 100% but with student loans, you can forbear when your payments are more than 20% of your gross income.
If I am unable to find a higher paying job soon, I will be able to continue to forbear my student loan payments.
I think committed expenses are supposed to include minimum debt repayment amounts. I think the extra 10% is supposed to be above and beyond the minimum.
I also tried to use the 60% solution. For January, 75% of my income goes to committed expenses (taxes, health care, rent, utilities, car payment, insurance, gas, gym membership, food, cable, parking, etc.).
Saving Diva - You're right!
Hang in there. You have crazy income potential and soon you'll be making great headway at the debt. Just gotta be patient (which is nearly impossible for me).
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Good luck!
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