How to Save your Money using the 70 20 10 Money Rule

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Everyone loves to travel, either it be local of outside the country. As for me, I love local travelling. Travelling needs requires money. Who on earth would want to travel without any money in their pocket? I'm sure no one would like to be in a place without bringing some souvenirs.

I was scrolling my Facebook feeds I saw an image with a quote, “Once a year go somewhere you’ve never been before.” I was quite happy with that thought so I make sure that this year it would happen – that I would be travelling other part of our province that I never have visited before.

There I was thinking of travelling but there was something holding me back – money. I could not travel without any money. It’s not free. I would spend for sure since I want to travel for my own good. So I researched ways on how to save money and learned about 70 – 20 -10 money rule. I know 70 – 20 -10 principle more of learning method but I never think that it would be applied to financial aspect.

70-20-10 principle is the most basic computation when it comes to your finances but it may vary depending on your lifestyle. As for me, let’s start with the basic.

70 percent for living expenses. It is said to be that 70 percent from your salary should be allocated on your day to day expenses like transportation allowance, grocery, food and snacks, rents. 70 percent should cover all your basic necessity until you receive your next salary.

20 percent for Savings. Now savings is ideally divided into 3 parts but this is optional.

10 percent for retirement or insurance. Other than your employment contribution there are other firms that you may want to enroll like health insurance, life insurance or travel insurance. You may find insurance useful during travelling specially in covering medical expenses.

5 percent for emergencies. Emergency funds depends on how it is defined but ideally when we talk about emergency funds it should cover your living for the next three to six months.

5 percent for specific goals. Specific goals may differ amongst every one of us. It may either be for your wedding, car, and house but in my case it would be travel. 5 percent would be enough to cover a travel per year.

10 percent for Debt. Debt may be optional but in my case I have a cellular plan so I would consider as debt.

Again it may vary depending in your lifestyle and how dedicated you would be. As for me, I would consider the basic computation as my initial basis so I could travel this coming month.