Having responsibility to manage the household finances is scary, even a bit overwhelming at times. It’s a big responsibility and it can be stressful. You know many often wonder if they’re doing it right. Often, we just pay bills and don’t minimise the stress.
We live day to day and wonder where our money went because we get to the end of the week, or the end of the fortnight, or the end of the month, and the bank account is dry.
Below Marissa shares her secret on how to be the boss of your money and tell it where to go.
The secret is….
She calls this secret the 50/50 rule. Basically, the 50/50 rule is that 50% of your income should be allocated to your day to day living expenses, whilst the other 50% of your income should be for securing your home and your future.
So what does that mean?
Let’s break it down for you in more detail. 50% of your income that you get either individually if you’re on your own, or with your spouse, if you’re in a relationship, is for your living expenses. This includes your food and groceries, which should be about 22%. Marissa likes to allow about 4% for household bills, 3% for clothes and shoes, 6% for medical and health, 10% on transport for your own travel, and 5% on recreation, entertainment, and fun. So that’s a bit of a breakdown. But obviously you do what works for your lifestyle.
That leaves 50% of your income that’s going to be allocated to securing your home and your future. Let’s say maybe 30% will be for your mortgage repayments and 20% is the amount that you’re paying yourself first. That will include 10%, which will go into your investment fund, which could be towards super shares or property investment. 7% of your income towards a fund for emergencies. And 3% of your income for a dream fund. Making sure that you can take holidays when you want, buy the dream car, do things that bring you joy.
The benefits to the 50/50 rule… you minimise the stress and become the boss of your own money in no time! It will give you the freedom and flexibility to be spontaneous with your spending because you already have the money allocated to the buckets that ensure that everything that’s important to you and in your life, is accessible when you need it.
We hope that the 50/50 rule works for you and look forward to hearing how you’re going implementing it. If you like this tip please share it with your family and friends! We would love to hear how the 50/50 rule works for you!
For more help becoming the boss of your finances contact the team at Rise High here or leave your details below!