A Simple Budgeting Tip

January 22, 2014 | By | Comments (11)

piggy-bank_300Don’t know where to start when creating a budget? Alexa von Tobel, Founder/CEO of LearnVest.com and author of Financially Fearless, suggests using a 50/20/30 ratio when looking at your take-home pay.

When thinking of your finances, von Tobel says that 50 percent of your earnings should go to essentials (rent/mortgage, groceries, bills, etc.), 20 percent goes to your future (like paying off debt or saving for retirement), and 30 percent can be spent on your lifestyle—a.k.a., the “fun stuff.”

Get more financial help for everyday money worries.

COMMENTS

  1. Susie

    Ummm just my rent is 50%. Not including groceries, utilities, or bills. Come up with a better ratio!

    January 24, 2014 at 2:34 pm
    • Erin

      I agree. These ratios are unrealistic!

      January 24, 2014 at 2:38 pm
  2. Cmf8375

    10-10-80 makes way more sense.

    January 24, 2014 at 2:51 pm
  3. Vernster

    Not realistic.

    January 24, 2014 at 2:55 pm
  4. Heidi

    I just checked my ratio and ours is 50/20/30 (bills/spending/saving) and we only make the average amount for our zip code. I think it is realistic!

    January 24, 2014 at 3:52 pm
  5. Sherrie Boettcher

    20 percent is needed for tithing so numbers would need to be different if this is included.

    January 24, 2014 at 6:15 pm
  6. Rose

    God only asks for ten percent, Sherrie.

    January 24, 2014 at 7:06 pm
  7. priya nair

    @
    Susie then u need to start renting a place that you can afford . I am a Financial Planner and i live by this ratio.

    February 2, 2014 at 1:00 pm
  8. Henry

    We tithe 10% before taxes, save 30% before taxes and spend the rest after taxes.

    February 5, 2014 at 10:55 am
  9. Sherrie Boettcher

    Rose you are so right I don’t know what would make me think 20- blond moment lol

    February 28, 2014 at 11:28 pm
  10. Van for rent in manila to tagaytay

    Very good article. I will be dealing with some of these issues
    as well..

    March 19, 2014 at 3:23 pm

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