Budgeting Tip - A Sixty Forty Solution

The most difficult part of creating a budget is determining what the foundation of the plan should be in order to make it work.

What can you use as a budgeting foundation?

You could build it upon the 60-40 Solution!

This budgeting tip is sometimes referred to as: 'The 60% Solution', but I like to think of this as the 'Sixty - Forty Solution'. It just seems to be a easier way for me to remember the phrase for the way my mind thinks.

The strategy is based on using 60% of your budget for the essentials such as housing, food, clothing etc.

60%-40% Solution

Then you use the remaining 40% to split up for emergency funds, play money, long term rainy day funds, and your investments for retirement.

We all need a safety-net!

If you have children, when you plan your budget don't forget to set aside some funds for their *allowance commission, and each time they earn their *allowance commission, give them a budgeting lesson at the same time - following the sixty forty solution - of course!

Budgeting doesn't come easy for many, and to make matters worse it doesn't seem to be taught in school (well at least not when I was there).

Just think of how rich your children could be by the time they retire if they follow and stick with the 60% budgeting solution!

*In a recent article I shared the idea of paying kids commission for chores, instead of paying an allowance! Read my article to learn why!