In the example to the right the person or family makes $3330. This amount is then multiplied by each percentage amount allotted by the budget. You can use the budget with any income amount and you can adjust the percentage to meet your needs.
The retirement amount is set to 10% in this example because that is what is needed to get the $333 per month contributed to the retirment account which is the maximum for a Roth IRA and also leads to the Million Dollar Compound Interest example on the Home Page. If you have a lower income, such as $2000, the percentage needs to change to 17% to give you $333 needed to meet the Million Dollar retirement plan.
You may also adjust the Mortgage/Rent to meet your payments. Maybe your percentage would go down if you pay less than $1000. However, a good rule of thumb is to not pay more than 40% of your income to the cost of rent or mortgage. This is a sure way to becoming "home poor." If you are over 40% it is time to downgrade to a smaller or less expensive home. Another benchmark is no more than a combined 25% going to retirement, savings, and investing. |
