Do you struggle with saving money? You aren’t alone. Numerous people today try all different methods and means to put money away.
How The 60 Percent Solution Can Change Your Finances
Some people are saving for retirement. Others are saving for the vacation they have always wanted to take. Still others are saving for those unexpected expenses that always seem to show up when the money is tight. If you need to set up an account for any one of these reasons, then it may be worth comparing savings accounts at moneysupermarket.com or another such comparison site.
Instead of complicated figures or computer software programs and elaborate charts and graphs, you can simplify the way that you look at your income and the amount that you save.
The 60 percent solution isn’t complicated. It isn’t something that will require a degree in mathematics or economics. In most cases, with just the assistance of a calculator, you can begin to save more.
How To Implement The 60 Percent Solution
It begins with looking at the amount of income that you bring in. You can look at it yearly but it may be easier to both implement and understand if you look at it monthly or per pay period.
The simplest way to explain the method is to say that you are going to attempt to keep your expenses down to just 60% of your income. Your expenses include everything from your house payment to daycare, gas for your vehicle and insurance.
These are all things that you are responsible for paying. You only have 60% of your income in which to do this, so it is time to take a good hard look and see whether or not this is possible.
If it is, you have made the first adjustment to becoming a more diligent saver. If it isn’t, it may be time to take a look at the expenses that you are responsible for and see just what is keeping you over the limit.
For many people their mortgage payment or car payment is eating up too much of their 60%. While it isn’t always easy, consider looking at making a change to something that is more affordable.
Some people look at the figures and notice that their credit cards are keeping them out of the 60% plan. If this is the case, get as close to 60 as you can. Use any and all of the money that you would typically save to begin to pay off debt.
Paying the minimum will take forever. Put the extra money that you would have saved towards the balance until these expenses are no longer a problem.
It may just be that you tend to overspend on things that aren’t necessary. It could be the constant eating out and entertainment that you take on each and every month. It could be the clothing, furniture, or household items that are weighing you down. Look for places to cut, keeping you within the 60% solution.
So, what happens to the 40%? This portion of your income is saved. Yes, it is a lot. Yes, it might seem unattainable. However, you can divide up the percentage to put it in perspective.
Take ten percent and use it to save for retirement. Use ten percent to invest, looking for some type of return. Ten percent should be saved in an easily accessible account for those unplanned expenses.
Finally, use the last ten percent for yourself. It could be that you can use it throughout the month for fun things that you and your family want to do. It could be that you are saving that ten percent for a vacation that you can’t wait to go on. In either case, this ten percent is yours.
At first, it might seem like an impossible plan. But instead of wasting time with specific budgets that just don’t seem manageable, the 60% solution makes it easy to stay within your limits and save up for different things, giving you the feeling of real success.
photo by Jim Capaldi
© 2011 – 2012, Khaleef “Fat Guy” Crumbley. All rights reserved.