![]() ![]() For example, maybe you don’t have debt to pay off, but you do have monthly expenses for your pets. If you see any glaring omissions of your major spending categories, add them. To find the answer, let’s walk through this step by step. You’d think it would be easy to figure this out, right? Ha! It turns out this is one of the toughest questions in personal finance. ![]() Before you can do anything else, you’ve got to figure out how much these add up to. A good rule of thumb is that fixed costs should be 50% to 60% of your take-home pay. Step 3: Calculate your fixed costsįixed costs are the amounts you must pay, like your rent/mortgage, utilities, cell phone, and student loans. Now, let’s break down how to come up with your numbers for each category. Your spending doesn’t have to match these exactly, but I would be cautious about straying too far from these percentages. The percentages for each category outlined above are my recommended guidelines. ![]() Vacations, gifts, house down payment, emergency fund, etc.ĭining out, drinks, movies, clothes, shoes, etc. ![]()
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