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.

If you are currently on the 100% plan or the 100+% plan, sit down and see if you can work towards either a 90/10 or the 80/10/10. The good news is that it is up to you on where you give back, and how much you give. I would encourage you to start with 98/1/1 where you live on 98% and give and save 1% each. Try that for the first year and then see if you can go to 96/2/2 until you get to where you want to be.

Money is just a resource and it should be used as a reflection of your values. Your budget is to help you use your money as an expression of your values. Share with us how it goes and ways you give back. The paradox is “the more you give, the more you get.” Good luck and happy budgeting!

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