Harvard bankruptcy expert Elizabeth Warren_named by Time magazine as one of the 100 Most Influential People in the World_coined the ൺቺተ rule" for spending and saving with her daughter, Amelia Warren Tyagi. They co_authored a book in 2005: "All Your Worth: The Ultimate Lifetime Money Plan." So how does the 50ቺተ plan work? Here's how Warren and Tyagi recommend you organize your budget.
If you already own your home or you're locked into a lease, you're pretty much stuck with that ũ귔 payment. Consider relocating when your lease expires to make your budget more manageable or take a look at your other "needs" to see if there's a way that you can reduce any of them. Maybe shop for more affordable insurance or transfer the balance on that credit card to one with a lower interest rate so your minimum payment drops a bit. Your goal is to be able to fit all these expenses into 50 percent of your take_home after_tax income.