Household budget

Household Budget: Spending, Saving, Sharing

How to make a 70 20 10 Budget?” features a 70-20-10 Rule that is a maybe the most saintly financial management I’ve come across:

  • Spending – 70% on fixed and discretionary expenses.
  • Saving – 20% socked away for a “rainy day”.
  • Sharing – 10% charity donations.

While the USA recently set an all-time record savings rate of 32.2% (due to huge limitation on what people could actually do during the pandemic), the recent annual average has been about 7%. The record that this lockdown-juiced peak broke was 17.3% set in 1975 (on the heels of the gas crisis). So this article is advocating a routine level above the all-time high.

But if you think that’s ambitious, and you think that tithing died in the Middle Ages, the article also advocated a 10% (after-tax) contribution to charity. While such a generous level might secure your entry to The Good Place, such a fraction of income to good causes is beyond the convention of middle class.