THE 60 Percent Solution (continued from previous post)
This budgeting plan was created by a person called Richard Jenkins after realizing that his household finances worked best when his family’s so-called “committed expenses” were kept to a manageable level. After some experimentation, he decided that level was 60% or less of his gross pay.
Committed expenses include:
1. Basic Food, Clothing, Transportation
2. All Household expenses
3. Insurance premiums
4. All taxes, income tax, road tax etc.
5. Charitably contributions
6. All Bills, including phone bills, tv bills, electricity bills
Remaing 40% should be divided so that 10 percent go to each of the following:
1. Retirement Savings
2. Emergency fund Savings
3. Short term savings for irregular expenses like Vacations, New Gadgets, Gifts, Mahjong
4. “Fun Money” to be spent any way you want.