All work and no play can make anybody a dull boy (and it leaves us Unplggd bloggers without anything to write about). The truth is, unless you're in a bout of serious financial hardship, the money experts agree that you should splurge a bit on the things that you love. So how do you know if the new iPod Nano is a wise purchase? Split up your take-home paycheck with the rule of 30.
...unless you're a stock photographer.
Here's how it works:
- 50 percent of your take-home pay (after taxes) should go to NEEDS. Things like rent, utilities, gas money, insurance and basic groceries.
- 20 percent should go to SAVINGS. Put it away for retirement or a down payment on a house. Any payments you make on existing debt can be budgeted here, too.
- Leaving 30 percent for WANTS. This is where you'd budget for weekend restaurant splurges, your unlimited data plan or a new TV.
So the rule of 30 says that if you're living below your means, using around half of your take-home pay for basic living expenses, you should feel good about spending a little bit of cash on yourself.
- USE THIS: MSN's 50/30/20 budget calculator.
If you're not yet at the 50/30/20 budget breakdown, don't worry.
A financial advisor will tell you that it's a goal to work towards (and a goal you might never completely reach if you live in high-rent cities like New York or San Francisco). But knowing that guilt-free tech splurges are on the horizon is a pretty good motivator, right?