The 60% Solution suggests allocating your monthly gross (pre-tax) income like this:
- 60% to Committed Expenses such as taxes, clothing, basic living expenses, insurance, charity (including tithing), and regular bills (including things like your cell phone).
- 10% to Retirement.
- 10% to Irregular Expenses such as vacations, major repair bills, new appliances, etc.
- 10% to Long-Term Savings/Debt — money set aside for car purchases, home renovations, or to pay down substantial debt loads.
- 10% for Fun Money to be used for dining out, hobbies, indulgences, etc.