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This is really important. It's called
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the 65205. The idea of it is to take
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your net income. This is your take-home
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pay after you pay taxes, not the number
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on your job description, and you want to
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split that into three buckets. the
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fundamental which is your core living
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expenses. Everything that is essential
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to your living costs, mortgage and rent,
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utilities, the groceries, all of that
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should make up approximately 65% of your
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net income. 20% that's for your fund
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spending, the Glastonbury tickets, the
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Pilates class, that should make up about
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20% of your take-home pay. And the
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remaining 15% that's for your future
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year. That's today's you, planting seeds
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for tomorrow's you. And that should go
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to savings, investments, and extra debt
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payments. And those are three good
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numbers that I think everyone should
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know and understand. It's a good
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starting point to try and benchmark your
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numbers or your income against those
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spending categories. I would say,
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however, if you are someone who's living
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closer to paycheck to paycheck, those
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numbers might look slightly different.
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When it comes to future you, start with
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what you can. Whether it's saving 2%,
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3%, start somewhere. You just want to
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build that habit.