The Budget Challenge
Okay, so you have been tracking your expenses and you are getting ready to set your budget based on your values. Now I want you to consider incorporating some values into your budget, such as 100% or 90/10 or 80/10/10.
Goal of a budget is to spend less than you have coming in. The old rule of thumb is to save 10% of your income and live on 90%. This is great advice given our economic time and job uncertainty. You should be putting at least 10% of your income into retirement savings, and then you need to have an emergency fund as well. The key to savings is to PAY YOURSELF FIRST! Treat your savings like a bill that you would never miss. With each pay check, transfer money into your savings account. Even if you have other bills to pay, I feel it is important that you save on a regular basis. This gets you in the habit of saving, even if not at 10%.
Now the challenge is to reflect your values. The 80/10/10 rule is where you live on 80% of your income, save 10% and give away 10%. Personally, we value our community and we feel that it is important to give back to our community. When we were in college without any income, we would give back in our time and talents by volunteering.