Streaming issues? Report here
John Maytham 2019 1500 BW John Maytham 2019 1500 BW
Afternoon Drive with John Maytham
15:00 - 18:00
volume_up
volume_mute

Up Next: The Money Show with Bruce Whitfield
See full line-up
Afternoon Drive with John Maytham
15:00 - 18:00

Home
arrow_forward
Business

Enjoy life and save for the future by splitting income using the '50/15/5 rule'

14 October 2019 10:30 AM
Tags:
Warren Ingram
The Money Show
Save
Bruce Whitfield
Savings
Income
Personal finance
Galileo Capital
Retire
ra
investing
Pension
INVEST
retirement annuity
saving
emergency fund
Fidelity
50/15/5
50/15/5 rule
You only live once — personal finance guru Warren Ingram on divvying up your income if you're not the budgeting type.

The Money Show’s Bruce Whitfield asked Warren Ingram, a financial advisor at Galileo Capital, how to divvy up his monthly income so that he can enjoy life, save for the future and not worry about money every month.

Ingram suggests following the “50/15/5 rule”, developed by Fidelity in the USA.

It’s great for those who don’t like to budget every month.

Image courtesy of Maitree Rimthong (https://www.pexels.com/@maitree-rimthong-444156)

15: Save 15% of your pre-tax salary for retirement

Invest the 15% in a company pension plan or your own retirement annuity (RA).

If you are not saving this amount now; then arrange an annual increase in your savings.

For example, apply to increase your RA contribution by 10% next year.

5: Save 5% of take-home pay for short term savings

You should have an emergency fund that can cover three to six months’ expenses.

Ingram warns that this fund should only be for when disaster strikes, not unplanned expenses that are necessary but not an emergency (e.g. replacing a car tyre, fixing your smartphone screen, extra medical costs, maintenance of your car, etc.)

50: Spend 50% of take-home pay on essential expenses

  • Housing — mortgage, rent, property tax, utilities (electricity, etc.), homeowners’ insurance, and rates

  • Food — groceries only; not restaurant meals

  • Health care — medical aid and out-of-pocket expenses (e.g. prescriptions, co-payments, etc.)

  • Transportation — commuter fares or car payments, petrol, car insurance, parking, tolls, maintenance

  • Childcare — day care, education

  • Debt payments and other obligations — credit card payments, student loan payments, child support and life insurance

The rest

The rest of your total income can go towards entertainment, clothes, luxuries, holidays, etc.

Want to retire before you’re 65?

Saving and investing 15% of your pre-tax salary for 40 years should allow you to retire when you’re 65 years old.

If that’s too old for you; you’ll need to cut from “the rest” to increase your retirement savings.

For more detail, listen to the interview in the audio below.

Get the 10 most-read articles of the week from Bruce Whitfield’s The Money Show, emailed to you every Friday morning:

Subscribe to our Business Wrap Newsletter


This article first appeared on 702 : Enjoy life and save for the future by splitting income using the '50/15/5 rule'


14 October 2019 10:30 AM
Tags:
Warren Ingram
The Money Show
Save
Bruce Whitfield
Savings
Income
Personal finance
Galileo Capital
Retire
ra
investing
Pension
INVEST
retirement annuity
saving
emergency fund
Fidelity
50/15/5
50/15/5 rule

Recommended

More from MyMoney Online

Receipts expenses till slips tax 123rf 123rfbusiness 123rflifestyle

Pay less tax when working from home

27 May 2020 9:19 AM

Craig Rocher on the criteria you must meet to claim for “home offices expenses” and which expenses are deductible (NOT the phone).

Share this:
Read More arrow_forward

Donald Trump Huawei 123rf 123rfbusiness

Is a Huawei device without Google Play worth it? Read this before you buy...

26 May 2020 11:57 AM

Google services such as Gmail and YouTube don't work on Huawei devices, but there are workarounds, says Jan Vermeulen.

Share this:
Read More arrow_forward

Paper moon bookshop second-hand books

Second-hand book fan? Indulge your weakness, and save Paper Moon Bookshop

21 May 2020 3:07 PM

Kieno Kammies interviews Chris Ormrod, owner of Paper Moon Bookshop (there’s one in Muizenberg and Woodstock).

Share this:
Read More arrow_forward

gumtree-widejpg

Gumtree SA activity surges: 'People realise they have more stuff than they need'

21 May 2020 2:12 PM

You can now deliver the stuff you advertised on Gumtree, says its General Manger Claire Cobbledick.

Share this:
Read More arrow_forward

Foodeez cookies past "best-before" date

Buy hugely discounted, perfectly good food beyond its 'best before' date

19 May 2020 9:49 AM

"We deal with non-perishable food that is good for many, many years after the 'best before' date," says Dave Bester of Foodeez.

Share this:
Read More arrow_forward

Piggy bank mask covid-19 coronavirus 123rfbusiness 123rflifestyle 123rf

Super-safe investment offers sky-high interest rates (10%) – it’s not a scam!

18 May 2020 12:01 PM

Personal finance experts agree - RSA Retail Savings Bonds is having more than a moment, right now. Your bank simply can't compete.

Share this:
Read More arrow_forward

Covid-19 closed mask small business coronavirus 123rflifestyle 123rfbusiness

[EXPLAINER] Covid-19 loan guarantee scheme for small businesses is now open

13 May 2020 9:08 AM

Bongiwe Kunene (MD, Banking Association SA) carefully and clearly explains the terms of the loan and who may apply.

Share this:
Read More arrow_forward

virus malware cybersecurity 123rf 123rflifestyle 123rfbusiness

Mimecast finds 115 000 fake Covid-19 websites designed to steal information

12 May 2020 9:20 AM

Distrust anything Covid-19 related that you receive from outside your trusted parameter, warns cybersecurity expert Brian Pinnock.

Share this:
Read More arrow_forward

broken piggy bank breaking 123rf 123rflifestyle 123rfpersonalfinance

You may have to cash in your retirement savings – but read this first

11 May 2020 2:44 PM

Feel tempted to cash in your pension? Refilwe Moloto asks Andrew Davison (Old Mutual) for pointers.

Share this:
Read More arrow_forward

volkswagen-polo-vwpng

Struggling to repay your car loan? About to miss a payment? You have options...

5 May 2020 11:00 AM

"The banks do not want to repossess your car," says National Debt Advisors CEO Sebastian Alexanderson.

Share this:
Read More arrow_forward

More from Personal Finance with Warren Ingram

Old house abandoned namibia 123rfbusiness 123rflifestyle 123rf

What will become of South Africa's property market and industry after lockdown?

30 April 2020 7:52 PM

Personal finance expert Warren Ingram shares his concerns and offers a few pointers.

Share this:
Read More arrow_forward

piggy-bank-coins-money-budget-savings-personal-finance-123rf

Earn up to 11.5% interest on one of the safest investments around

16 April 2020 7:33 PM

Personal finance guru Warren Ingram on why you should consider this risk-free investment, especially if you live off interest.

Share this:
Read More arrow_forward

Piggy bank mask covid-19 coronavirus 123rfbusiness 123rflifestyle 123rf

'If you still have a job, get rid of your debt as fast as you can'

2 April 2020 8:04 PM

Personal finance expert Warren Ingram has advice on how to survive – or even thrive – amidst the Covid-19 outbreak.

Share this:
Read More arrow_forward

household-bills-debt-expenses-money-finances-black-young-couple-worried-123rf

Struggling to pay a debt? Your options: credit insurance vs debt relief holiday

1 April 2020 6:29 PM

Personal Finance expert Maya Fischer-French on the pros/cons of dipping into credit insurance vs opting for a debt relief holiday.

Share this:
Read More arrow_forward

piggy-bank-coins-money-budget-savings-personal-finance-123rf

Market crashes - what happens to investor money afterwards?

12 March 2020 8:43 PM

Warren Ingram, wealth planner, has sensible advice for investors in gloomy times.

Share this:
Read More arrow_forward

COVID-19 virus coronavirus outbreak blood sample test tube 123rfpolitics 123rf

How to invest and manage your money when the world gets 'flu'

5 March 2020 8:05 PM

Markets are in turmoil in the wake of the coronavirus. How can you ''quarantine" your funds in a safe space?

Share this:
Read More arrow_forward

Price money consumer groceries

Budget 2020 made simple: how does it impact my personal finances?

27 February 2020 8:14 PM

Wealth builder Warren Ingram on how the new budget affects you.

Share this:
Read More arrow_forward

stock market crash.jpg

Is the US stock market heading for a crash like the DotCom bubble in 2000?

20 February 2020 7:57 PM

The US market has a big impact on all markets and when they get flu, South Africa sneezes.

Share this:
Read More arrow_forward

stress-black-man-papers-laptop-work-tax-fees-money-finance-woes-businessjpg123rf

This is the last month you can do any tax planning for the year

6 February 2020 8:23 PM

We ask financial planner Warren Ingram to help get our tax ducks in a row.

Share this:
Read More arrow_forward

invest.JPG

This is how you should invest your money for the next decade

23 January 2020 7:57 PM

Personal Finance - Tips on how to invest your money.

Share this:
Read More arrow_forward

More from The Money Show with Bruce Whitfield

sugar-bowl_spoon.jpg

PwC report finds accounting irregularities at Tongaat Hulett

2 December 2019 12:36 PM

The Money Show's Bruce Whitfield chats to Opportune Investments fund manager Chris Logan.

Share this:
Read More arrow_forward

Black Friday shoppers shopping consumerism 123rfbusiness 123rflifestyle 123rf

FNB processes almost 3,000 transaction per second on 2019 Black Friday

2 December 2019 11:16 AM

The Money Show’s Bruce Whitfield chats to CEO Jacques Celliers on the impact the day had on South African bankers.

Share this:
Read More arrow_forward

180323 Cape Town International Jazz Festival 2018 5

'I’m very conscious about how I spend. I don’t buy fancy cars. I buy bargains'

14 October 2019 11:07 AM

Bruce Whitfield interviews Sipho Hotstix Mabuse about his attitude toward money (hopes and fears, successes and failures, etc.).

Share this:
Read More arrow_forward

South African passport

'Emigration is draining skills, destroying the future of South Africa’s economy'

10 October 2019 3:37 PM

Small business guru Pavlo Phitidis shares shocking anecdotes and advises business owners on how to address this challenge.

Share this:
Read More arrow_forward

Income tax

How to get a nice, fat tax refund from Sars (a guide for business owners)

9 October 2019 2:57 PM

The Money Show's Bruce Whitfield interviews Daniel Baines, author of "How to Get a Sars Refund for Small Businesses".

Share this:
Read More arrow_forward

jeremy-mansfieldjpg

Jeremy Mansfield gets real about his money and beliefs about it

13 September 2019 1:03 PM

Bruce Whitfield interviews Jeremy Mansfield about his attitude to money (hopes and fears, successes and failures, etc.).

Share this:
Read More arrow_forward

Albie-Sachs.jpg

'We had a disdain for money. Material possessions counted for so little'

12 September 2019 3:20 PM

Justice Albie Sachs talks about his attitude to money (hopes and fears, successes and failures, etc.).

Share this:
Read More arrow_forward

riky-watch-ricky-rick-live-as-we-prepare-for-huawei-joburg-day-2018

My daughter (10) and son (5) must start working early - Riky Rick

30 August 2019 2:06 PM

Bruce Whitfield interviews rapper Riky Rick about his attitude toward money (hopes and fears, successes and failures, etc.).

Share this:
Read More arrow_forward

used-car-salesmanjpg

Buying a used car? New app sends mechanic to inspect it before you decide

28 August 2019 8:16 PM

Hanru Reyneke is on a mission to disrupt the used-car industry in South Africa by providing peace of mind to punchdrunk consumers.

Share this:
Read More arrow_forward

Craig Gradidge Gradidge-Mahura

I come from having very little, to having a lot - Craig Gradidge

28 August 2019 6:31 PM

The Money Show’s Bruce Whitfield interviews Gradidge about his attitude to money (hopes and fears, successes and failures, etc.).

Share this:
Read More arrow_forward