Budgeting for people who can’t or won’t ever budget
Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.Charles Dickens
To achieve financial freedom and independence you need to live within your means.
One way of assuring you spend less than you earn is to draw up a budget.
Too lazy for that?
Consider a “30/30/40” allocation of your income:
30% - Allocate this proportion of your income to make provision for when “stuff” hits the fan (e.g. life insurance, pension fund, medical aid, short-term insurance, rainy day savings, etc.)
30% - Never allocate more than this to the cost of your credit cards, mortgage, car repayments or any other loans.
40% - Allocate this proportion of your income for living expenses (excluding anything mentioned above).
Kieno Kammies asked Certified Financial Planner (CFP) Paul Roelofse to elaborate.
Listen to the interview in the audio below.
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