Tuesday, September 11, 2007

10/10/80 Rule

My husband, Bob and I, were taking the puppies out for our traditional four mile walk this past Sunday at 6:00 AM. We usually stop by Vons and get a Starbucks coffee at the halfway point and I buy my four copies of the Sunday paper (for the coupons, of course!). When I was paying for them, a twentysomething year old man walks up to the cashier holding an Emmy. Yes, as in the statue. He was acting nonchalant, as if everyone in California carries an Emmy to the grocery store while buying crackers and cheese whiz.
This guy was tatted out the wazoo, had spiked hair and piercings and was walking around carrying an Emmy. Apparently, he was bringing it by to show a friend of his that worked at Vons. The award belonged to his dad, who got it in 1993 for sound mixing on a television series. He said his uncle had won 8 of them and another uncle had been nominated for 2, but never won. We asked him if he was going into the family [sound mixing] biz and he said, "No, I'm going to med school." He was totally serious.

If you want to win an Emmy in finances, then I recommend my 10/10/80 Rule (TM). This is a fail safe method of managing your money that helped my husband and I get out of $40,000 worth of consumer debt, buy a house, pay cash for cars and put our kids through college debt free.
Here is how it breaks down:

First 10% - Give Away
Second 10% - Put Away (Save)
Final 80% - Spend Wisely

By giving away the first ten percent, you free up your money to be able to help other people in your community. You can put this amount into a non-profit of your choosing, but it's important to give it away. The second ten percent should be saved for your future. I recommend an automatic withdrawal from your paycheck to the savings vehicle of your choice (regular savings, 401(k), Roth IRAs, etc). The final 80% should be spent wisely (without the use of debt.) For an abundance of ways to spend your money wisely, keep an eye on this blog or look at the bookstore for resources.
With the 10/10/80 Rule (TM) you are sure to spend less than you make, and create wealth for you and your family.
Ellie Kay
America's Family Financial Expert (R)