Where does the money go?

An intriguing title popped up on my Pinterest feed: The 50/20/30 Budget. Of course I had to click through to see what this was about. It’s a recommended way of setting up your budget to get your money to work for you. The categories are essentials (50%), lifestyle (30%) and future (20%).

I’m always on the lookout for ways to assess my budget so I decided to plug in the numbers and see how my 2015 and 2016 budgets fared against this structure.

Aim 2015 2016
Essential 50 57 48
Lifestyle 30 27 28
Future 20 16 24

It’s exciting to see that even before knowing about this structure I’ve been organizing my finances so that they were more closely meeting this criteria.

The chart was done using the budgeted income that does not include my debt repayment. In spite of the fact that I rarely account for that money in my budget I thought I’d see how my real numbers would look. In truth my figures are close to 50 (future – including debt repayment), 30 (essential), 20 (lifestyle).

I’m alright with this as well. In fact it makes me insanely excited as it proves that I’m fully capable of living comfortably below my means and achieving my future dreams.

Does this breakdown work for you?


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