I have 2 separate budgets. I have my monthly obligations like rent/utilities/debt. And then I have a daily living budget for food/animal maintenance/entertainment/household maintenance. I have $500 of each paycheck go to the daily living budget. The rest sits in the savings until the end of the month when I pay my bills for the following month. I pay everything and then divide the remainder - 50% to debt reduction, 25% to savings, 25% added to the daily living budget. This is working really well for me.
Thank you for this breakdown. I've burnt through a lot of my savings being out of work; I've been looking to re-enter work but have never stuck to a budget for more than 3/4 weeks. this is a lot easier when said out loud.
I pay myself first,I have 500.00 a month, taken out of my check a month, goes directly in my savings first ,then pay my bills using the avalanche method
@@rachelnavarro2897 I paid the highest interest ,bill off first, which was a 10,000 credit card ,it took 17 months ,one left to go and that will be paid off in 2023, thank you Jesus, its cash only now
@@barbarafallin2038 ahh I see...so you meant debts. I got confused when you said bills, I was thinking of utility bills and other things, not the debts. Yes, I know the method and how to use it but was trying to get more understanding. Thanks
Thanks for this video. I happened to stumble across it on my recommended videos. I'm currently doing the 50.30.20 but now that I've found this option (70.20.10) and learned of the 80.10.10, I may be less stressed out about my budget. Thank you!
I prefer the 50/30/20 because I find that most people put so many “wants” as “needs” so it’s easer to not overspend on “wants” thereby directing this money to savings/debts.
Bola I love this budget plan! What I had been doing was just focusing on my savings allocations. 60 long term- retirement 25% emergency funds 15% impulse (so that I can enjoy simple pleasures. I'm excited to work on my budget with the 70-20-10 plan along with my current savings plan! So So happy I found your channel, I'm hooked!
I continue to tell people I counsel on finances about your RU-vid channel. Excellent video and thanks for all your hard work creating money management information. 🙏💗
I just started a new strategy. I divide each paycheck into money for debt bills (including extra debt payments), living expenses and none debt bills, and savings. Debt and living expenses/other bills get priority, and savings get what is left. Right now the percentage breakdown is 45:37:18. While the 70:20:10 method would probably pay down my debt quicker, I have too many things I'm wanting to save for, and I would rather try to save for them now then have to put them on a credit card when that unexpected car repair or trip comes up. The 70:20:10 and the other methods will be more feasible once I get my monthly debt minimums lowered. Thanks for the video!
I will definitely try this method. As I was listening to the video, I was making my notes and doing calculations to see what my budget would be. Thank you very much
I use a more detailed budget. I used to do in a spreadsheet with the 50-30-10-10, however, I like the budget planner I am using since January 2022. I can really see where I am spending each month.
Great video as usual. For me, the budget method that works best for me is the Zero budget method. Allocating all my money each month. If I do have money left over, it goes to my savings.
Good morning from Tx yes I'm going to start the 70/20/10 rule you're beyond helpful and instrumental to my life heading towards financial freedom. Thanks a Million
I so love this vedio be ause it is exactly what I have been doing but not prioritizing saving but paying off debt. Thank you Bola for this. I will definitely now strictly follow this.
This actually makes sense to my neurodivergent brain. I'm calculating my percentages and bills right now. I'm calculating for 70/20/10 but may be able to do 60/20/20
I use 60-10-10-10 not yet working perfectly but getting there slowly. 60- Daily expenses, 10- Saving/smile, 10 - splurge, 10- Fire extinguisher/debt payment.
@@mirabai305 Oh I forgot that other 10% for my Mojo/Emergency fund that I build up to at least minimum of 6 months expenses in case of emergency or short term loss of job/income etc. If I have a larger debt I would adjust my Fire extinguisher to 20% to be able to pay up quicker.
I take the median income for my family size and base our budget on that. Fortunately I make almost twice that. I use the rest to invest 22% and save 20%. So instead starting with a percentage I use a median income for our budget number. 2500 every two weeks which has increased to 2650 due to inflation. I use the rest to max out my 401k at work and fund one or two Roth IRA's. Then I apply any more to sinking funds after my emergency fund is fully funded. The advantage of this is we live on less than I make and it allows for a decrease in my income should that happen.
I was today's years old when I learned about the 70-20-10 budget! I've only heard about the 60-20-20 budget bit thanks to your explanation I k ow understand that the percentage can be adjusted. I might give this new percentage budget a try in the new year. So all living expenses (I.e. a hair cut or waxing and nails) need to fall under the 70%?
Ive been so bad with budgeting. My excuse is usually the inconsistency of my income so then i fail to budget completely. That hasn't worked for me, so im paying attention now. Thanks for this.
I would have liked an example of how this method would work in the midst of this inflation filled environment. My utilities and grocery bill changes weekly it seems. Just when you have a handle on it, it changes.
70 20 10 is my goal, currently I am very far. I became a widow 9 months ago. For now on giving I am at 0 percentage, savings I am at 21,35% and leaving expenses I am at 78,64.I want to change these numbers in a year. To hopefully be at 70 20 10
I must share, that as a minimalist, I used to think I wouldn't have a lot of expanses - but the case is the opposite. Because I wanted to wear the same thing all the time, I literally find myself constantly shopping on websites, looking for more of what I have (if it wasn't available in a certain quantity before) and even buying it in any price. My last credit card bill, received yesterday, was enormous, literally in the thousands - and this was for spending only. Bills aren't even included. I don't know how to change it and though I enjoy my minimalist, clean life (I really don't own anything unnecessary and also what I have is not a lot - about 15 daily dresses altogether, a few socks, knickers and two pairs of shoes), I feel it's taking me down financially these days.
Perhaps a cash budget would help you begin a relationship with your money, thinking of each bill as a belonging. Have your monthly income in actual cash to see the ratio of how many bills you are losing to online shipping vs what you receive in return.
Thank you for the video 😊 I contribute to a RRSP at work and understand that amount will be in the 20% category However, the % is taken from my gross income and not from my net income How can I calculate what is left for the 70-20-10? If you could give me an example with numbers? Thanks 👍😄
Question, do you budget in amounts that are taken out of your paycheck before taxes? For example, my car not comes out before payment is disbursed. I feel like the answer would be no, but I just want to be sure. Hope to hear back! -RB
Thanks for the question! You should plan your budget based on the actual money that hits your bank accounts - this would be your post-tax income i.e. the income after taxes have been taken out.
Thank you for mentioning, that it has to be possible to live on 70%, I work in Germany and my rent is 70% of my income (after tax). I always worked a second job to make ends meet, when I could get a day off I tried to find a cheaper flat and/or searched another job. But that is not easy in Germany. I always worked two jobs to make ends meet. A side hustle is necessary to survive. I work in the German health sector, we a very short on staff, if you are qualified please come to Germany, it only takes 3 years on average to make your college-degree "acceptable" for Germany because we are the country who invented burocracy. Your degree has to be translated by a professional translator, that costs only about 1000€. So if you want to come to Germany, you better bring money to survive 3 years without income, because they work slow. It could take so long until you are allowed to work by the governmemt. But we need people in the health sector. But be prepared that you will have to work 2 jobs to survive :)
Thank you so much for this simplified approach. I want to ask where investments come in, is it from the savings or other goals? Also is it advisable to have money tied up in just investments (like fixed deposits, shares) and no savings? Thank you
I've heard it's a good idea to invest some of your money and also have a savings account you can access easier for emergency. I have a high yeild savings emergency fund and then also my investment account which i put money into regularly
@@oyeyem glad i could help! Good luck on your financial journey. Another rule of thumb to follow for the emergency fund is typically to save enough money to cover 3-6 months expenses. So keep putting money into it until you've reached that. It'll of course if you use it but that should be the goal for that.
I use the 10-10-30-50 10% Giving 10% Savings 30% Cash (groceries, gas, misc) 50% (living expenses) As far as debt, I try to find ways to make extra money to pay it off.
Depends what value they bring to your life. Are you buying a new phone because you need it or because you want it. Is it overpriced, and does this phone make your life actually better i.e. would you still buy it if nobody knew you had it? Does the trip enrich your life, would you take it even if nobody knew you had it? Now divide the price of these onto the months until you need a new one. For me, I get a €700 phone and use it for a year and half or two years. I divide the 700€ into 18 and save that much per month. The same for the rest. If I know I spend approx. 1000€ a year for renewing my wardrobe and shoes I have in mind that around 100€ per month goes for that. If Gifts for others in a year cost 1000€ divide that into 12 and so on.
Hello dear, pls I am a Nigerian and I am in d country right now, where can I buy your books in Nigeria or can I order them directly from you for them to be delivered to my place? I want to know pls, coz I want to buy them urgently, thanks.
I used a detailed budgeting last month (as a start to really track down my budget) and i went overspent on several categories. So i do plan on budget all spending categories into one and divide it to 4 week. 70% sounds assuring for someone who just started budgeting.
