Setting up a 10-20-70 Budget

"10% SAVINGS The first and most important rule is to reward yourself by putting 10% of your take home pay into savings. Once you have established an emergency fund you can transfer this amount to a different investment vehicle. An emergency fund should equal three months income. If it becomes necessary to withdraw money from this fund, build it back up immediately from the 10% savings.	20% SPENDING This is considered fun money. Too often a budget is viewed as a financial straight jacket. With 20% of your take home pay reserved for spending, you will have something to look forward to each payday. This is your spending money, so spend every penny of it. Have fun! Some typical categories include: spur of the moment ideas, recreation, midnight pizza raids, etc.	70% EXPENSES This is the nitty-gritty of the budget. It covers all expenses required to survive on a day-to-day basis. This category is split into fixed and variable expenses. Fixed expenses include: Mortgage Insurance Car Loans, etc. Variable expenses are controllable and include: Phone Cable Television Groceries Magazine Subscriptions Credit Cards, etc.

This table courtesy of ZilchWorks.com"

<Note from JobFairy.com: Yes, it's important to take your paycheck, move the decimal over one position to the left (that's your ten percent) and put it in savings, but until you get caught up, you have to concentrate on getting rid of debt. There are few investments and no savings accounts in this world that pay you more in interest than you'd be paying out in interest on credit card balances. Also, they say to pay your mortgage or rent first, but if you're paying daycare, pay that first of any of your bills. A good daycare provider is hard to find!>