I think the point about setting boundaries for yourself is a good one. I just don’t think it needs to be made as complicated as it is here. Thanks for the post though.

1)create budget-give fuel and grocery budgets wiggle room for soaring prices. Use coupons, price matching. I base meals off sales and items already have that will expire soon.
2) Don’t create more debt–Credit cards, car loans,etc.
3) pay yourself first-every raise, raise 401k election, contribute to savings acct, emergency acct, or any other acct you want( I also have one savings acct allocated to vacations and one to Christmas fund)
4)Think before you buy-stick to grocery list,ask yourself do I need or want this?I realized that even though I have bought all of my clothes on clearance, I had ALOT of clothes. I don’t need any more so I have vowed not to buy anything new until I have to throw an item away. EX: If my flat black shoes break, I can get another pair of those–nothing else.
5)organize your life–if you organize pantries, fridge and freezers, you can see what you have. Make lists of what you have, so when making grocery list, you know you already have some. Put more expensive, healthy foods to the front of fridge so you don’t waste them, and mark expiration dates on canned goods so you know when you have to use them by.

I have many more rules I follow but I could write a book on them all!I just wanted to share a few.

El Nerdo, if this is based on net income, is the 20% savings supposed to be in addition to your pre-tax retirement savings?

My “rule?” With rare exceptions, I don’t spend more than $2/lb for pork, chicken — or, if I can get it, beef. (Which is REALLY tough nowadays.)

I also use the $2/lb (in fact, $1, if at all possible) for fruits and vegetables. You’d be amazed at what you can get for $1/lb, if you’re careful. (Sprouts grocery stores are the best for this.)

Thanks for an interesting post.

Reason I love the ratios is I am just busy and tired and stressed out and I don’t have the energy or inclination to track every penny and make a line item for bus fare and another for tomatoes; the ratios simplify everything and just work, no need to overanalyze every 25 cents you drop into a parking meter.

All I want to say– really– is– read that damn book! Just– read it! What you do with it after is your own business. But at least find out what it says before you make up your mind about it.

It irks me that every time I hear people criticize those ratios or dispute the notion of what’s “want” and a “need” is from people who haven’t read the book and are just operating from hearsay.

Because the book, in fact, makes the case that different ratios may apply in different stages of life! It recognizes that ideals aren’t always achievable! It’s not a preachy book at all!

But I can’t summarize a detailed book into a comment, can I? Which is why I say over & over here– read-the-book! Read it! It will help cure your stress, I hope, and make your life easier.

Of course if you find Elizabeth Warren too much of a preachy fanatic (she isn’t) I could refer you to Suze Orman and her advice to the young and fabulous, which is– put your life on credit! You’ll make more money later! (That didn’t work for me. Maybe I wasn’t as fabulous as I though. This knowledge– it wounds me…)

But seriously– seriously! Read the damn book! Just– don’t waste your energy arguing with me! I am nothing to you, I promise. I’m just words on a screen. You’ll forget me by tomorrow morning. Your life is yours to live, and you need tools! That book has tools! Good ones! Free at the library! Why refuse them?

I get it that your life is tough at the moment and I don’t (can’t!) hold it against you. Actually I think you’re doing great with what you have, from what you say. And I get it that you’re frustrated, and if I was to guess why it’s because your “wants” ratio is so low you’re chafing at the constrains.

Yes. Rent. Insurance. A high percentage of your money is already spoken for when you get it. And unless you’re a natural ascetic (I’m not, I’m more of the sybaritic/epicurean persuasion, and I have no plans to change) the constrains are going to eventually drive you off the wall.

They did it to me after a year of, oh, what do they call it? “Gazelle-like intensity”. Sheesh. That may work for some. It did for me for a time. EVentually, it was too stressful. It was madness. I’m not wired for it. There are those who say I should continue, how dare I… but– they can’t make me. Ha!

Balance. That’s the key for me. Yes, you may need a different number. Or you might need a different solution. Who knows. What you do is up to you. But don’t spit on a book you haven’t yet read! It’s a great book! Argue with St. Elizabeth Warren, not with me, not with the preachy internet either! I promise it will be worth it, reading her. I adore her. She’s fantastic.

Alright, best wishes, and hang in there! Help is on the way!

Ignore all of that.

My issue isn’t with the book. My issue wasn’t even with your comment. It was just the straw that broke the camel’s back. 50/30/20 is a great ideal and I understand the logic behind it. That doesn’t mean that when I put together my 40% rent plus my 20% medical insurance, I’m left with much options other than trying to adjust the 50/30/20 to something more like 70/15/15 while also trying to make more money so that someday rent and health insurance alone don’t make up 60% of my income.

My issue is with the fact that sometimes our lives just don’t fit into the ideal. I’m looking for ways to get myself to a place where I can do 50/30/20, not for someone to tell me that if I’m not doing it now clearly I’m doing my financial life wrong. I don’t need yet another person on-line trying to tell me that if only I had made different decisions in the past or if only I understood XY and Z I’d be preaching it too. I want to make it to the ideal. But that doesn’t mean that my life fits into the ideal now.

She certainly didn’t write “All Your Worth” for one-percenters and trustafarians, but for working people of all stripes.

I myself don’t make a lot of money, so I don’t need a lecture on the lifestyles of the privileged, which clearly I’m not. Which is precisely why keeping my commitments to 1/2 of the paycheck is so important.

The 50/30/20 works when you’re earning a regular income, so that if you lose your job etc, you can pare down cost and live on that 50% while you collect unemployment or whatever.

See how that works? The book was written and the formula was set up with this in mind. The 50 is your fallback position.

If, while earning a regular income, you’re spending 60% of your paycheck on rent, 20% on food, 10% on transportation, 9% on entertainment, 1% on savings, have no medical insurance, you’re setting yourself up for disaster when the spice ceases to flow.

Get angry all you want, but this is the truth.

If you’re already stuck in the land of unemployment, then you’re in a ratio of 100% needs, which yes, I’ve been there, and not so long ago by the way, so I don’t need a lecture on how it’s hard to do without. I got into PF because I was desperate. You’re preaching to the choir.

Please stop being angry and read the damn book. It’s a good book. Free at the library. Best wishes.

Second, I graduated from college when the recession first hit. Most of my friends and I struggled: moving back in with parents or accepting subpar living situations, trying to find jobs, accepting jobs that pay little have long hours and few benefits just to be employed, experiencing all sorts of upheaval/job layoffs/companies closing, etc. When I see people touting “change careers” or “move to a cheaper city” they are ignoring the fact that for all of my adulthood most of my choices and those of my peers have been, to be frank, slim and terrible.

I think that I’m doing as well as I can: like I said, I don’t have debt and I strive to put away money each month. But my situation does not fit into the worldview of many PF blogs and commentors and the moralizing I hear over people in my or Beth’s situation (just don’t have dogs, etc) ignores that sometimes the decisions we make in the past can’t be so easily erased.

To put it another way: no matter what you might think, you have no way of knowing that the decisions you would make in my position would be better than the ones I make. (A point which is illustrated quite well, I think, with this “game”: http://playspent.org/)

Which are all totally unhelpful. Yes, thank you, I have never thought of moving or getting another job or more income streams! And clearly dropping the husband, kids, dogs, and house by the side of the road and driving off is absolutely what you should do! Every man, woman, child, and dog for themselves!

Sorry if I seem snarky or upset, I came to the comments here because I really liked this article: specific ideas about how to think about your expenses and ways to evaluate how a specific purchase might fit into your budget. But then I see the same sorts of comments I see everywhere and I just … sort of snapped. The moral judgements and one-size-fits all advice of PF blogs and comments are seriously getting to me.

It’s like … You eat out?! You have dogs?! You live in an expensive city?! You have a morgage?! You have a low paying job?! All of these are wants! You shouldn’t have bought a house unless you could pay for it in cash and already had an emergency fund and a fully funded 401(k) and college funds for the kids! What, no! That’s not how life works. We make decisions, for good or ill, and do the best we can. I come to PF blogs because I want to find ways to manage my money better. I don’t want for some random person on the internet to give the same platitudes again and again that I *know* don’t fit my life and financial situation and then get judged for disagreeing.

ARG.

Aaaaand /rant

My food bill has gone down, but not hugely because I now entertain a lot more. We no longer go out to eat for birthdays and festivals, my friends come around for meals, and I offer to hold BBQs, etc. In a way, this has affected a wider group of people, and my cooking has gotten better. I now cook for up to 10 people every weekend, it’s great to catch up with family and friends and way better for our health and wallets.

(Oh, and we own our home, so then we have the “fun” of paying for home expenses.)

I guess what I’m saying is, we’re trying to do the best we can. I would love to sock away 20%, or even 5%, every month, but until our income increases dramatically, I don’t see that happening.

I’m starting out in my career, making less than $25,000/year without benefits while living a fairly expensive city. This means that for me to afford rent, health insurance, and public transportation I am already exceeding 50% of my income. That’s not even getting to food, household expenses, etc.

I’m lucky in that I have no debt and that I’m not a spender by nature so I can afford to set aside a portion for savings and for wants, but until I reach a level of income that is significantly higher than it currently is, I can’t do 50/20/30. I just wish that more people on PF blogs remembered that not everyone is coming from the same socioeconomic sphere and as such no advice is one size fits all.

1. If I’m not socializing I can’t order dinner. This is because I want to save my “restaurant” line item for socializing, not being lazy. It helps that I like to cook and I’m fairly good at meal planning, but every once and I while I want to just have someone else do it for me. Reminding myself of why I have the restaurant line in my budget keeps me on track. And specifying “socializing” not “at home” allows for my roommate and I to have occasional pizza and movie nights — I might not be going out to socialize, but it’s a fun roomie bonding activity so it counts.

2. I can only have one beverage (usually tea) from a coffee shop per month. This forces me to plan ahead and make tea at home and take it with me in a travel mug and to save my once a month purchases for “emergencies” — usually traveling or having to get up early or stay late for work.

3. This isn’t so much a rule, but a backup plan. I keep a line item in my budget for $30 for taxis per month. That’s approx what it costs for one taxi ride to my apartment from downtown or the airport. I usually don’t use this, but I’m a single woman in my twenties — this helps me feel safer, knowing that the trains break down or some other emergency happens I have the money set aside.

Wonderful book, and for me a great transition from the crash-diet ultra-frugal approach.