All Your Worth

What if my employer deducts health insurance premiums from my check? If your employer deducts health insurance premiums, enter in your total income before those deductions are taken. (The same goes for deductions for disability and life insurance.)

We put forth three simple guidelines to decide what qualifies as a “Must-Have”: Could you live in safety and dignity without this purchase (at least for a while)? If you lost your job, would you keep spending money on this? Could you live without this purchase for six months?

Keep the number in front of you because it is your goal: This is the amount of money you want to squeeze from your Must-Have expenses, so you can get your monthly spending into balance. Every time you make a cut in your Must-Have expenses, put it toward that goal.

According to the smartest economists out there, that takes a minimum of 10% of your income to get ready for retirement. The Balanced Money Formula earmarks 20% for Savings so you will have enough to save for retirement and have plenty left over for all your other dreams.

Our research led us to a very simple and incredibly powerful financial principle that you won’t hear anywhere else—balance.

There are only so many money minutes in your day, and you have to spend them wisely. If you use them up trying to save $5 instead of $500, you won’t get very far.

Putting food in the right category is also a bit tricky. Obviously you “must have” food to live. On the other hand, if you’re like most of us, you could probably cut way back on the amount you spend on food. You could stop eating out, stop buying beer and frozen dinners, and live on beans and rice (or something similarly cheap) if you really had to

So you can pay off your past

Why 50% for Must-Haves? That’s the first question most people ask. The Must-Haves get only half your money? Half? How can that be? Are we saying you live on only half your money? Not exactly. We’re saying you should limit the hard-core commitments to at most half of your income. Remember, Must-Haves are the things you will have to pay no matter wha