50/50 Balanced Budget

By | 03/29/2011

Part of living a balanced life is allocating the right amount of money you make. There are 2 main categories you can put money towards, needs, and others. Our needs will vary depending on what we’re comfortable living with, what our appetite for immediate satisfaction is, our risk tolerance, and how much money we’re making. When I mention other spending I simply mean everything else the left over money goes towards.  Undoubtedly everyone’s situation will be different. Right now I’m spending about 50% of my after tax income on my version of “needs,” like mortgage, utility, insurance, and 50% on “others”, which includes eating out, movies, and savings/investments for the future. I’m pretty happy with this balance of 50/50 right now. Is this the average ratio for most people? I can’t say because everyone’s idea of needs vs others are different. Of course mine will change in the future, so it’ll be fun to track my spending and see which side I’ll end up leaning towards.

Author: Liquid Independence

Editor in Chief at Freedom 35 Blog.

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