According to Gail, the Life Pie "is very flexible and is only meant as a guide so that you have some sense of balance in your budget. If you’re way over in one place, you have to be way under in another. The bottom line is that you can’t spend more money than you make."
You can see that because Jordan and I have 0% allocated to debt repayment, that leaves us a lot of wiggle room. We have decided to allocate this money towards life - we've got plans to finish the back yard this year (deck, fence ect) - so that money will come in handy.
For anyone who doesn't recall the post, or didn't click on the link, here is the breakdown of Gail's recommendations vs the exact percentages of ours.Not only do we have 0% allocated to debt, we also spend less in housing then she suggests, and we contribute more to long term savings.
For those who like the details, keep reading below.
When filling this in, I started with what we spent last year and also had a look at what our budget for 2013 was - that helped guide this. Using our utilities tracking history and tracking our daily expenses (gas, vehicle maintenance etc.) also was a big help in being accurate.
Spending on life makes sense although spending on the yard could be called housing, too, and it could add value to your house, for a bonus
ReplyDeleteI hadn't thought about that at all - hmmm.. I like it though! It would be more representation as well - because on the surface it looks like we are going to 'blow' a bunch of money in the 'life' when it's investment in the property value.
DeleteI love you.
This is an interesting view. We have two houses, so we're spending a lot more there, but we're considering our property part of our overall retirement portfolio, as we will sell & drastically downsize when we're ready to retire. It also means we can live in a great school district, but lots of sacrifices now to afford all of that. Property where we live is very expensive - a 3 bedroom house is over $750K!
ReplyDeleteThat makes sense too - to include it as part of you retirement portfolio if that's the intention. I wouldn't have though tof that either.
DeleteWowza! $750K! Do incomes make up for the increase in property values?