Chaosplay

One of most common budget I have seen is like 10% for savings, 10% for charity and rest is for you to spend as you like. This is a great plan but I am always trying to minimize my spendings and maximize my savings and investments. A while back I decided to get rid of unnecessary bills, pay off credit cards and optimize my spendings. I realized that I could live in 1/3 of my before tax pay. If it wasn’t for car loan, I would be able to reduce it further or actually live quite comfortably in 1/3 of my pay.

Anyways I came up with this budget:
25.00% Taxes
12.00% Savings
12.50% Roth IRA - Until I reach max contribution
12.50% Stocks Investments
5.00 % Higher risk investments/business
33.00% Personal expenses

This budget gives with me expenses for rent, food, cell phone, auto insurance and payments, gas and Netflix. I know this budget does not include all possible expenses like auto maintenance, clothing, recreation, and many more. Right now, I don’t make enough to really live within this budget but it serve as a guideline. And all unexpected expenses come out of savings, so my actual savings are usually less than 12%. And yes I don’t have an allocation for charity yet. Honestly, I plan on charity whenever I can.

These are a few steps I did to reduce my spendings:

• I canceled my gym subscription, now I run outdoors and workout at home.
• I canceled cable and instead got Netflix since I hardly ever watch TV.
• I downgraded my cell phone minutes to cheapest plan. Now I land line whenever possible.
• I cut down on eating out and also stopped going out every weekend.