Tag Archives: finance

Why the 50/20/30 rule is ridiculous

17 Jan

There is a rule floating around the interwebs that says you should organize your finances according to the 50/20/30 rule. Essentially, your fixed expenses should total 50% of your take-home pay, 20% should go to savings/investments and the 30% left over is for discretionary spending.

That sounds pretty stupid to me, because as I’ve said before, percentages mean nothing except in relation to an integer.

Let’s say you’re a recent grad making minimum wage. In the U.S., that’s $7.25 ($9.32 here in lovely Washington state, but let’s go with the low number. If you work 40 hours a week, and are single with no dependents, that’s $13,500 in after-tax money a year, or $1125 a month. Continue reading

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Apparently we were poor – and I’m so glad

18 Aug

We didn’t have much money when I was growing up. I found out much after the fact that we received food stamps into my elementary school years – explaining why we shopped at the grocery store across town. My mom was afraid we might run into someone we knew closer to home. And I thought we had milk coupons that only worked at that store. The ways people protect their kids. Continue reading