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The 60-30-10 Plan

A sensible and effective budgeting tool.

John Zapata

on 13 February 2017

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Transcript of The 60-30-10 Plan

Financial Independence
and peace of mind.
Must Have's
This Plan is Sustainable over years
and has been tested over time.
Mortgage or rent
Car payment
Monthly bills
Phone & Internet
Eat out/movies
Vacations - Gifts
Clothes - Toys
401K - IRA
Emergency Fund
Never pay a Want before a Must Have.

Be especially careful with amounts spent on gifts, toys, parties, birthdays and anniversary's.
If you keep the must have's
at no more than 60% you can
weather a lot of storms - you
maintain "flexibility" because in a pinch, you can make one or more of these payments from your savings...
You will probably never bounce a check by mistake.

You will no longer pay misc fines and/or expensive late charges.

You will have the money reserves for most unexpected expenses.

You will have the solid peace of mind that having a little slush fund provides.
Monthly income of $2,500 or $30K/yr = $2,250 net
Must Have's at $1,350/mo
Want's should be $675/mo
Savings should be $225/mo
Monthly income of $4,166 or $50K/yr = $3,500 net
Must Have's at $2,100/mo
Want's should be $1,050/mo
Savings should be $350/mo
Monthly income of $6,250 or $75K/yr = $5,000 net
Must Have's at $3,000/mo
Want's should be $1,500/mo
Savings should be $ 500/mo
Why Budget
at all?
And it fosters
positive relationships,
avoids stress,
builds financial strength.
Having a plan is always better than not having any direction to go by.
Arguments over spending or saving money is the #1 cause of relationship stress and divorce.
If you are constantly worried
and arguing about money -
there is very little time in a
relationship for loving and caring.
Why use the 60, 30, 10 plan?
The real treasure in this budget plan is the peace and happiness that it can bring to your relationship. You and your significant other are working together and communicating about money.

You are eliminating one of the main cause's of dangerous stress in a relationship and you have worked out a plan to live by.

Everyone should know that money problems are one of the leading causes of break-ups or divorce, - - - and not talking openly about how you are going to spend and save, even with older children - - is one of the biggest mistakes you can make.
You pick up a cup of coffee and a bagel on your way to work,
You stop at an ATM for some cash and pay fees on both ends,
You stop at the store for milk and make other impulse purchases,
You get gas, buy a scratch-off, and/or rent a movie,
You write an insufficient check and pay fees..
You pay a bill late and rack up more charges..

At this rate you could easily spend $300 to $400 per month on items that you didn't need and are not in the budget. Imagine the money you would have if you just cut your Phantom Spending in half!
"Phantom Spending"
Remember, along with
Phantom spending, this
area of
the most discipline.

When asked about the
secrets to a long and
happy relationship, the
longest married couple in the U.S. (80 yrs) - John & Ann Betar, stated there are only a few simple rules and they begin with:
"Live within your means"
Tampa Tribune - Fri, Feb 7, 2013
A small Emergency fund and minimum
balance in checking are "keys"to making
this budget work. It is your fail-safe for any unexpected expenses in a month.
(You may just want to use your min/bal for your slush fund-helps credit standing)
With even a modest amount of savings,
(not 401K or IRA)
some very good things happen - such as:
Having a good amount of control of how & why you spend your money pays real economic dividends, however some of the best results of an agreed upon money plan are emotional.
What is the 60, 30, 10 plan?
Simple - It is a budget!
One of the most important parts of
financial knowledge and behavior is:

The practice of Budgeting.

This is because a budget actually manages
the money that you actually control.
One of the biggest problems of household finance
is that people tend to focus on the wrong element,

People just naturally focus on the overall amount of money - when they should be focused on where the amount actually goes!

It is really not about the amount of money you make in any one year, it is about how you spend and save the money you do control!
Always keep in mind, your "must haves"
these are the
bills you have to pay
no matter
what else may come up during the month.
OK - So now that we
have framed the
problem, what
can we do about it?
Full transcript