Most of us have all heard of the 60/40 plan where you live off 60% of your income and divide the other 40% between retirement,savings,etc. We have also heard of Mary Hunts Plan where you live off the 80/20 plan, live off 80% of your income and with the 20% left you will tithe 10% of that and put the other 10% aside for savings. Of course it will depend on your income but even if you could live off 95% of your income that would be great! One could start off by doing up your budget, write down everything including entertainment etc.Here you will find a % guide for a family of four and here for a family of six. The main webpage for a % guide whether you are single,married couple,single parent etc can be found here. Get an idea on how low you could go to still live without feeling deprived. If you owe debt however, you would have to include that in your living expenses and not take that out of your savings from what I understand, correct me if I am wrong :).However, dh and I would have to throw that 30% onto our debt if we try out the 70/30% plan opposed to dividing it up into savings as long as we have the $1000 emergency fund still intact which we do have now. I guess that would be similar to the Dave Ramseys plan.
I am really starting to think that dh and I could live off 70% of our income. How did I come to this conclusion? Well, we do owe debt on the credit card which needs to be paid off however since paying off previous debt,everything else are regular bills. Our house in which we bought was well below what we were approved for by the bank,however we also bought another house prior which my parents are living in and they pay the mortgage although we are however paying the taxes and insurance each month.If and when my parents decide that they don't want to live in the house we bought for them to live in dh and I will be putting it up for sale. We will then take the equity from that house and put onto the mortgage of our principle dwelling.
Dh and I will have to go over the figures until we have everything budgeted to a "T".
Something to think about and we could at least try it for 3 pays or 6 weeks and see how we adjust.That is how long it normally takes us to adjust and we will know if it is a yay or nay. It is certainly worth trying after the New Year to start our 2008 goals on the right foot. We might just find that we can even move down to the 60/40% plan or we might even have to move up to the 80/20% plan.
Does anyone else go by living on a % plan for their budget?
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I'm currently living off 70% of my income, but that includes my loan and credit card minimum payments so once they're gone it should be much less than that!
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