The 10/20/70 rule budget may be new to most of you. But this rule, when it comes to budgeting has been widely used, mostly by those who have heard and studied about it.
Admit it or not, budgeting has become more difficult for you as expats. With the number of priorities that you might have, it is inevitable that you sometimes fail to come up with a strict budgeting rule to follow. Hence, at times this leads to difficulty in managing savings and expenses.
But such difficulty should not hinder you from having a paradigm shift when it comes to the process of budgeting. As what I have mentioned from my previous articles the 10 Steps on How to Create an Exact Budget, it is a must!
Not only because it saves you in the long-term basis, but it also makes you feel empowered about your savings and expenses. That is why I am here to let you know about the 10/20/17 rule budget. Through this, I hope that I could help you develop the mindset of pursuing this one and making it into a reality in the monthly and daily basis. Get to know it, explore it, and be ready to apply it. As expats, I believe that this is what you ultimately need.
1. What is the 10/20/70 rule budget?
The 10/20/70 rule budget means that in every income that you get, you have to divide it into three categories. 10% will be for the expenses that you will contribute to your religious affiliation or what we called tithing, 20% for the savings and the remaining 70% shall be designated to your operational budget. All you have to do is divide your income correctly into these percentages.
2. Pros of 10/20/70 rule
This rule budget has a lot of advantages that you have to know before delving into it.
1. It makes budgeting more comfortable for you in a way that all you have to do is divide. And once you’ve distributed it well based on the percentage, you have to live within those percentage.
2. You are guided with numbers. The number itself would entail that you know exactly how much should be for this and how much should be allotted for that.
3. You are in total control of your income. You can right away put it in its designated area of percentage and see how it could help you be a better financial manager for a long time. You are the boss of your budget.
3. It is doable
With its comfortable and convenient division of income, this 10/20/70 rule budget is DOABLE! All you need is the discipline to do so, strictly and consistently. Just be sure about the percentage, always follow it wholeheartedly, and in the end, you’re going to benefit a lot from it.
4. The advantage of paying yourself first attitude
Paying yourself first literally means saving something for yourself before anyone else. This is not an act of being selfish. Rather, it is an act of setting your priorities for the future. This is a way of ensuring that no matter what happens to your career as an expat, you always have the downfall because you saved. The most significant advantage of paying yourself first lies in the idea that you are assured of whatever the future holds. Just because you prepared for it.
5. Why I like 20 budget rule for saving
The 20% budget is indeed one of the best parts of this rule that I want the most. Why? Because it entails savings! I do not have to worry anymore about being stressed-out in counting the remaining income that I have for savings since I know from the beginning that I already kept a part of it. So, it’s easier to save through this budget rule, and that is why I like this 20% the most.
But you can always increase this up to 30 or 40 percent. This can happen when your salary also increases.
6. 70 budget rule breakdown
The 70% rule breakdown now entails paying our operational expenses. This includes monthly bills for internet, water, and electricity, transportations, food clothing, education, and other bills or insurances that you have to pay. This is why most of the income that you get is designated in this area because the coverage of these is what keeps you going in your day to day activity. You have to make sure that you live within your means so that you won’t have to overspend and get a percentage from the other 10 and 20 parts.
7. A 70 budget rule for a single person is a big advantage
You might be wondering now, why? Well, this is for the reason that because you’re single, you will have to pay less when it comes to expenses since you might be sharing the bills with the rest of the family members. Plus, you do not have the children yet to spend on the education aspect. Imagine, fewer expenses for bills, more budget for savings! Then the 20% budget now can be increased to 30% and even 40% savings. And of course, the more savings you have, the better it will be.
8. If you are out of a budget, it means to start a side business
You might be asking now that if you spend your whole income in expenses, savings, and bills, there would be no more left for you. There is no need for you to worry because I’ve got the perfect tip for you. If you encounter this one already, it is time for you to look for a side-job. Something that you can conveniently do in your spare time without sacrificing the quality of your regular job. You may go for side-businesses like blogging, network marketing, e-commerce, and the likes. Once you’re earning from a side-business, you will be more financially free.
In general, the 10/20/70 rule budget will be of great help to you in whatever aspect. May it be financially, emotionally, and physically.
As expats, remember that finding the proper and suited rule budget is significant. Because as what I have been emphasizing for quite some time now, your working time is limited in a way that you cannot work forever.
There shall be a time that you will have to retire and eventually take a rest. This is why managing your savings and expenses is tantamount to breathing. Every moment that you breathe remember that there should always be a part of you thinking of how you would manage your financial life. May the 10/20/70 rule budget help you prosper!
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