I’ve heard about the 50/30/20 rule (which, by the by, is attributed to Elizabeth Warren and daughter Amelia Warren Tyagi) before this latest journey deep into my finances. There are many kinds of budgeting perspectives – some really very detailed, while the 50/30/20 is less so.
I’ve had my budget organized in fixed versus variable expenses for a little while and thought that was fine. I had larger budget categories of fixed, variable, debt, and goals. Boom. But I haven’t been able to shake the idea of 50/30/20. So this weekend I just messed around with my budget, slotting into the three categories. Since I have some serious debt and a savings goal deficit of [redacted] years, for the foreseeable future I will aim for 30% towards debt and savings goals and 20% towards fun. For the past year-plus, my budget has been more 50% debt, 35-40% needs, and the rest slotted for fun/savings/haircuts.
I am not sure what it is going to be like to have more wiggle room in my budget. One of my more prominent worries is that I won’t feel the difference once my debt payments and loans go from 51% to 10% of my gross monthly pay. That looks impossible on paper. How could I not??? But as I try to build up a proper emergency fund and fully fund my retirement account for the first time in a long while, my money is spoken for. I’m not sure that I’ll be able to spend more on groceries. Maybe $20?
This year, I might manage to save for retirement and put a big chunk into my emergency fund. But my car is limping along and I’m hoping to buy a new-to-me used car late this year or early next year. Thinking about spending my first proper emergency fund – which doesn’t even exist yet – is… ugh. Even if I spend it in pursuit of avoiding a car loan.
So the 50/30/20 is my goal for 2019 – in 2018, I’ll be busy playing catch-up, reallocating former debt dollars for nest egg bucks. Dream big, kiddos, and eat frozen vegetables.