The 70/30 budget

Hello Week 7! This is one of my favourite topics and a simple money trick I have used for years!

Let me introduce you to the 70/30 budget. Imagine you are a General of a small Army and its your job to make sure the troops are housed, fed and entertained but you need to do it on 70% of your resources because the other 30% needs to be set aside for strategic planning. 

We are not preparing for war, but really you need to look at your income as a resource and prioritize those expenses the “troops” use so there is money left over for strategic planning of: debt repayment, retirement, kid’s education, home repairs, vacation, Christmas….got it? 

Take 70% of your household income and create a budget from that- soooo what if there isn’t enough for all that you like/want/need to do? Go back and review those items and really decide if they need to be there because that bloated cable package may be keeping you from hitting your retirement date of 65 rather than 71. 

Have debt?? That’s ok…so does 89% of Canadians. Don’t worry- I got a plan! In the 70% portion of your budget take care of all your minimum payments and to make traction with the debt using the further 20% to strategically pay it off. It might take a few months or even a few years but if you will see light at the end of the tunnel. 

When you are debt free, repurpose the 20% for your retirement, kid’s education and even paying off the mortgage early. 

What about the last 10%? Use that to build your Emergency fund. In an earlier email we talked about the magic of a $1000 and in a later email we will talk about how to build that nest…. Use 10% of your income each month and you will get there in no time.  

WARNING, once you get the hang of this 70/30 plan you will never go back. You will feel completely in control of your spending but more importantly will have prioritized saving back into your family’s future. 

Don’t miss this opportunity to get your family started on this new spending plan, book an appointment with me and get started.