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All Your Worth
by Elizabeth Warren, Amelia Warren Tyagi
by Elizabeth Warren, Amelia Warren Tyagi
The #1 thing I learned from this book is to divide your expenses into 3 categories; must-haves, wants, and savings.
Your MUST-HAVES should ideally be no more than 50% of your take home pay and include the bills that you would have to keep paying even if you weren't working (housing, utilities, modest food budget, etc). If you keep this number in line, it clears the path for your savings and discretionary income. HUGE lightbulb moment for me once I did my math!
Your SAVINGS should be 20% of your take home. (Retirement, emergency fund, investments, etc)
Your WANTS are the other 30% (pedicures, cable, movies, books, restaurants, clothing, entertainment, going to the bar, getting chips out of the vending machine, travel, internet, ancestry.com, taking classes, etc). You can spend your WANT money on whatever you want, but it's good to visualize that you're choosing one thing over another. It's helped me see the impact of my everyday choices. Would I rather get a pop at the gas station every day on my way to work?... or would my soul be better served if I socked that money away for a trip to Scotland?
Budgeting made easy! It's the first time I've seen it explained like this and it really simplified the way I view my finances.
Your MUST-HAVES should ideally be no more than 50% of your take home pay and include the bills that you would have to keep paying even if you weren't working (housing, utilities, modest food budget, etc). If you keep this number in line, it clears the path for your savings and discretionary income. HUGE lightbulb moment for me once I did my math!
Your SAVINGS should be 20% of your take home. (Retirement, emergency fund, investments, etc)
Your WANTS are the other 30% (pedicures, cable, movies, books, restaurants, clothing, entertainment, going to the bar, getting chips out of the vending machine, travel, internet, ancestry.com, taking classes, etc). You can spend your WANT money on whatever you want, but it's good to visualize that you're choosing one thing over another. It's helped me see the impact of my everyday choices. Would I rather get a pop at the gas station every day on my way to work?... or would my soul be better served if I socked that money away for a trip to Scotland?
Budgeting made easy! It's the first time I've seen it explained like this and it really simplified the way I view my finances.
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rated it 5 stars
Dec 04, 2011 06:55am
Every high school life skills/econ class should require it. More people and the sooner the better could adopt this plan. They could expand later, but would have a chance of a solid foundation. And maybe not want the big SUV or other budget killers if they saw how it affected their spending.
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