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The 70/20/10 Budgeting Method

The 70/20/10 Budgeting Method

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I am replying to A.J.Young Jr.’s post.—your post answer can be received/ understood in another way. You said that based on answers/ comments that we should/ require leaning on someone else to support our basic needs (UBI —universal basic income) and we don’t individuals who develop private businesses to employ people. Do you really expect those in charge in the government to really provide all your needs—I give examples—of two Congressional people who are Landlords and who got their rent from their rentals demand free rent for all. Free rent for all means no rent for all owners. Do you think AOC is going to share her Tesla with everyone or will Cori Bush let you live rent free in her rentals. Hey the government thinks that $25,000:year is sufficient to live on and you can afford to pay your healthcare premiums, full market value rents and food and utilities plus pay 12% federal income tax and state and local taxes.
What you should have looked at is why costs are rising but earned income is stagnant. We are in an inflation period which is working in the wrong direction for most people. Why should a loaf of bread cost $4 on average when it costs pennies to make. Rents are high because property taxes are so high. Taxes are high because we have so many people who can’t earn enough money on a minimum wage job. The only jobs being created by those big companies are minimum wage jobs—

Prices need to match wages. Okay a company needs to make a profit to re-invest the continuation of the business but not such a high profit that is not showing in the way they invest in their employees. Profit has been distorted in present time to not be reinstated into the company but to be hidden from taxation. Continue on the socialism pathway but remember to ask if your idols are sharing everything with you.

This is a great post! I personally save around 80% of my money to do savings/investments each month as I'm fortunate enough to be in a position to do so.

Was wondering for the posts that have too much of a high rent, etc: is this after room-sharing or is this a big, fancy apartment people are renting out? For example, when I first started out, rent was way too expensive (about 40% of my pre-tax income)--I ended up sharing a room in a very dirty and bad house for 1/4th of the cost. It wasn't pretty but it got the job done for me.

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goodmoneygoodlife.com

From the comments the larger questions is after outlining my current budget, how do I bring it into alignment with the ideal?

The average 2021 ost of Living for my area is estimated at $57K. That means you have to earn $35+/hr to cover COL + taxes, SSL, Medicare, etc. Now you need to cover that other 30% of the chart or anoer $12/hr making the wage $47+/hr. Not many of those jobs out there.

Someone at Penny Hoarder needs to get a life.

@Nicole D. posted:

@maria rose, if your housing costs (or other necessary expenses) are over 50% of your monthly income, it can definitely feel impossible to follow a percentage-based budget like the 70/20/10 method or the 50/30/20 method. Using a zero-based budget or a bare-bones budget would probably be a better fit, because these methods don't dictate how much to spend on what.

If you're spending only on necessities, but you still can't make your income stretch to cover everything, perhaps you can look into assistance programs such as food stamps or low-income housing programs. Some cities offer financial assistance for utilities, depending on income level. 211 is a great resource to find out what help might be available in your area.

If you're able, another option is to increase your income. This list of side hustles has a couple dozen ideas. Hope that helps!

Nicole, however your intent, you are missing my point. I fall into that “limbo income “level that is “too high “ to qualify for SNAP/ food benefits, plus it disqualifies me from “free”Medicare premium or assistance with Medicaid (which is a completely separate program), plus I have to pay full cost for my extra healthcare premium for coverage not covered by Medicare with no discount. Yet I am too poor to be considered rich. At at age 70, I should not have to look for a job to increase my income to survive. I have checked out WFH jobs offerings  and most of them require technology beyond a basic laptop or require relocation to another state. I checked all the “side hustle”jobs listed on this site. But thanks

Hi I’m not an expert but for me I have Disability vertigo dizzy unfortunately not on SSI  I don’t have any funds my wife works Make some so that I can help her out $20 here or there a week or every few days or whatever and yeah we all help with real life situation so that we can start to make money but show us how to budget properly I hope this makes sense didn’t mean to offend anybody

Yes, I hear you Maria.  I can't do a 70/20/10 allocation either.  My social security is the only income I have.  I have some savings that are invested, which I use to supplement the social security, but I use as little as possible.  I don't have any "disposable" income to use for saving or for entertainment.

@maria rose, if your housing costs (or other necessary expenses) are over 50% of your monthly income, it can definitely feel impossible to follow a percentage-based budget like the 70/20/10 method or the 50/30/20 method. Using a zero-based budget or a bare-bones budget would probably be a better fit, because these methods don't dictate how much to spend on what.

If you're spending only on necessities, but you still can't make your income stretch to cover everything, perhaps you can look into assistance programs such as food stamps or low-income housing programs. Some cities offer financial assistance for utilities, depending on income level. 211 is a great resource to find out what help might be available in your area.

If you're able, another option is to increase your income. This list of side hustles has a couple dozen ideas. Hope that helps!

If you like breaking up your budget by percentages, the 50/30/20 method is another good one to try. With that budgeting method, you spend 50% of your income on necessary expenses, earmark 30% for your wants and put 20% aside for savings, investing or debt reduction.

If you prefer a more detailed approach to budgeting, use a zero-based budget.

One of my personal favorite budgeting methods, however, is kakeibo. I like the pen-and-paper approach and the emphasis on being mindful and reflective about your spending. The way I personally budget incorporates those key aspects.

Articles like this give us another method of choosing how to prioritize your budget needs but it effectively doesn’t address the cost of the biggest necessity bill and it assumes that everyone is working with a theoretic income level. I would like to see a follow up on this using reality income and actual housing cost . I would love to use this technique if housing costs weren’t over 50% of my monthly income. It is time for this site to address budgeting issues from reality income below their theoretical models. I am not asking for  addressing this issue by not paying this necessity cost like some of the examples given on this site for debt removal because the majority of the readers here don’t have the ability to avoid not paying the rent or mortgage if they want to keep the roof over their head. I would like to see how to do this right. Too many people today think just erasing a big cost by not paying it eliminates this from their budget, but in real life situations  housing is a necessity cost that can’t be avoided. Okay we can’t control the amount of the housing cost because that’s decided by matters we don’t control labeled market value costs which is a political decision. Let’s get budgeting articles in real situations.

Last edited by maria rose
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