The MSN 50-30-20 budget test.
First,, before you begin or do anything like this, you will need to HAVE a budgetto take this test.
Once you have a budget, you will need to track your expenses. You can do this manually via a spreadsheet or you could go to any number of free budget sites such as Mint.com.
Once you know where your money is going, you will have a good idea of where improvement(s) can be made.
What this MSN article does is provide a representative model to compare your budget with. Now, this model is by no means a hard and fast rule, but it does provide a decent BASIC comparison.
First they set your monthly income level for a baseline.
Then you will be asked about your monthly costs for needs and wants and savings. (note: Monthly needs + wants + savings should = monthly income) A very basic but often overlooked fact.
Needs are the stuff you have to spend money on and or have a monthly bill to pay; like a mortgage or rent, utilities, or minimum monthly payments.
Then there are the wants; the stuff you feel you may need and are entitled too, but in reality can either do without or scale back and be just as satisfied. Granted ,some of these wants could be considered needs; such as clothing allowance, but mostly it is stuff like vacations, dining out, entertainment, gifts, and misc spending.
You will then be asked about savings amounts such as retirement funds, investments, savings accounts, emergency funds and any extra payments to put towards loans and such.
After these three basic screens are collected; two simple pie charts are displayed. Yours and the 50-30-20 model.
So, how did the Fumbled Returns Budget compare?
Not so bad, I think.
You will notice that our “Needs” is considerably more than the model and I have a very simple explanation for this.
We have seven, count em, 7 people in our family. Me, My Beautiful Wife and 5 tax deductions, Plus two dogs and a foster Greyhound.
This is considerably more than the 2005-2009 Census Bureau estimates of 3.19 persons per family and the 2009 National Pet Owners Survey of 1.7 dogs per household.
So, how does your budget compare?
Fumbled Returns 