Tag: 50-30-20

Budget Review & Mortgage Update

On By youmeanmeIn Budget PlanningLeave a comment

I was scrolling through my budget document and saw the list that I used to break down my expenses into the categories: Essential, Lifestyle and Future. I had skipped this process in 2020 so was curious to see how my current budget lines up with my goal to flip the suggested 50-30-20.

Here’s how it lines up with both the aim and previous years:

My Aim201520162017201820192021
Essential20%57%48%33%25%27%34%
Lifestyle30%27%28%30%29%21%20%
Future50%16%24%37%46%52%43%

While my Essential and Future costs are moving to the more traditional direction, I noticed that my essential block contains an increase to my monthly mortgage payments. With the added payments, we’re on track to pay off the mortgage in 11 years and 5 months – June, 2032. This would bring us 2 years shy of the original 25 year amortization.

Paying off the mortgage ahead of 50, would give us a solid opportunity to save for our retirement. This would include not only the savings to cover reduced income but the ability to outfit our home so we can stay in it as long as possible.

Using Guidelines: 2017 budget

On By youmeanmeIn Budget Planning1 Comment

Early last year I found another way to assess my budget: The 50-30-20 rule. I plugged in my numbers and was quite happy with my allocation. This year I opted to do it again with my proposed 2017 budget. Here’s what it looks like:

Aim 2015 2016 2017
Essential 50% 57% 48% 33%
Lifestyle 30% 27% 28% 30%
Future 20% 16% 24% 37%

The drastic change in the essential line is because previously it included the minimum payment of my debt. With no debt my essential costs are down!

My lifestyle cost is up as it takes into account my singing lessons.  I’m having fun doing the lessons and meeting people so I feel like it’s a great cost and it’s nice to see that I’m still within the recommended guideline.

That increase in my Future category makes me feel great! Since I still don’t budget with my entire pay once my top two categories stay within budget I may be putting a tiny bit more into future than reflected here.