So now, after encouraging you to save 10% for emergencies, 15% for financial independence (often called “retirement”), and 10% for long-term savings, we’ve whittled down your income to about 65%. This 65% is for day-to-day living. This is probably the part you think about the most.
As I’ve mentioned before, the easiest way to save is to automate the process. Yes, it takes a little work to crunch some numbers and set up transfers, but it is worthwhile to have things happen automatically. Then you don’t even have to think about it – the hard work of putting away money is done for you! After that you can adjust to your standard of living and not worry that you aren’t putting anything away for later.
Once you’ve figured out how to stash away money, you can slice up the rest of the pie any way you want. Obviously you need to figure out how to slice the pie to pay rent and buy food, but from there you can adjust other categories depending upon your interests and what’s important to you.
Stay tuned for more on slicing the pie to fit your priorities!