Lesson from the book, All your worth: Must Haves 50%, Wants 30% & Savings 20%
As part of my money management goal in recent months, I heard (the audio version) of the book, All Your Worth recently and it was an eye opener.
The summary of the book, it asks the reader to keep things simple and divide all incoming money into three categories, the Expenses into Must Haves & Wants. The remaining is Savings.
Must Haves are those expenses, you would not stop even if you did not have a job for an year or two, like Basic food, House, Fuel, etc. Rest are all Wants such as TV, Restaurants, etc.
Over long periods, particularly years, keep the above in following percentages:
Must Haves 50%, Wants 30% & Savings 20%
Within a few days of this, we had tracked our expenses and broadly knew more about our expenditure then we ever did.
The book has suggestions on how to bring the Pie back in balance. Beyond that it covers many other areas such as house purchase, etc.
More information:
Two of the book’s chapter are available from the official All your worth website: The Truth about Money and Financial CPR
It’s All Your Money blog has a detailed review of the book: Balanced Money Formula. He has shared a spreadsheet in the review that allows tracking money and follows the balanced money formula from All your worth.
The Simple Dollar blog also has a detailed review of the book: Review: All Your Worth
For you:
Finally, this book might not be the right Personal Finance book for you, depending on your spending habits, earnings, age, savings, etc.
Simple Dollar blog has an article with some suggestions in This Is the Right Personal Finance Book for You!