What percentage do you spend on Needs/Wants/Savings?

**Ima saver** · 01-13-2007, 08:35 AM

Re: What percentage do you spend on Needs/Wants/Savings?

I am saving 10%. I have a car payment and a land payment that takes up one paycheck. I don't know if that is a need or a want??

**kv968** · 01-13-2007, 08:53 AM

Re: What percentage do you spend on Needs/Wants/Savings?

That breakdown could get pretty tricky if you factor everything in. For example, I NEED a car but I WANT a BMW so I get a BMW. Car $15,000/BMW$30,000=50% need and 50% want. Same goes with real estate. It's a need, a want and a savings all in one. Oh, I hurt my own head

**Snoopy2645** · 01-13-2007, 09:27 AM

Re: What percentage do you spend on Needs/Wants/Savings?

Pracitcally everything in my life is a need. Maybe 80% needs & 20% wants in my life

**pearlieq** · 01-13-2007, 10:42 AM

Re: What percentage do you spend on Needs/Wants/Savings?

I just did some rough calculations. We're at about:

55% - Needs
21% - Wants
24% - Savings

This includes our budget over DH's salary. About 95% of my salary is saved, but I won't be working more than another year or so.

**Aleta** · 01-13-2007, 11:04 AM

Re: What percentage do you spend on Needs/Wants/Savings?

You would have to read her book to see what she considers must-haves and wants. When I did it, my must-haves were 56%. We live in the state of Fla and our insurances and property taxes here are outrageous. That, with our private health insurance keeps it high for us.

**poundwise** · 01-13-2007, 11:09 AM

Re: What percentage do you spend on Needs/Wants/Savings?

Originally posted by zetta

The book All Your Worth recommends that you split your money as follows...

In general, I don't care for strict adherence to a default, broad-based, breakdown like this, however, I do see the value in having it as a basis for one's own thinking and planning.

That said, I would not consider the savings category as fitting for debt reduction; as is listed above. Or, at least, if I was working a debt reduction plan, I would drastically reduce wants from 30% until the debt(s) was (were) paid and then come back to the original numbers.

For instance:
50% Needs
15% Wants
35% Debt Reduction
0% Savings

I also would point out that this system, in general, has one MAJOR flaw. As another user pointed out, who defines what is a need and what is a want? For an example: In the original post, you stated the following --

"I'm working on getting savings up to 10% by reducing the wants to 32%. It's not really possible to get our Needs back to 50% or less until I go back to work (I'm currently a SAHM) due to a high mortgage."

I would contend that that the statement, "it's not really possible" is entirely untrue. Perhaps you have too much house (mortgage) for your income and you should consider selling the current house and moving to a lower-priced one. Perhaps, I would be so bold as to venture to say, this is something you maybe ought to have done when you and your husband (presumably) decided that you would be and could be a SAHM.

In that sense then, I would say that while having a place to live is a 'need'; living where you do now, with the current mortgage, is not.

(Of course, all that assumes that you are wanting to adhere to the 50% 'needs' level, which may not be what you find works for you. All things considered, it would stand to reason that if 20% is a good figure for savings, then if your needs have to be 58% then you should limit your wants to 22%.)

In any case, I appreciate what a system like this is trying to get across. At its core, it is just asking people to plan, distribute, and set-aside accordingly. I'm fully in agreement with that idea.

**Aleta** · 01-13-2007, 11:14 AM

Re: What percentage do you spend on Needs/Wants/Savings?

The reason that she likes to get people down to 50% is because it works for the most part. If you were to lose your job, you would only receive 50 % of your income. Same for disability. So, she's saying that if you can live within this that you'll be well-prepared for anything. The book has a lot of merits to it. You just have to see where she is coming from.

**poundwise** · 01-13-2007, 11:24 AM

Re: What percentage do you spend on Needs/Wants/Savings?

Originally posted by Aleta

The reason that she likes to get people down to 50% is because it works for the most part. If you were to lose your job, you would only receive 50 % of your income. Same for disability. So, she's saying that if you can live within this that you'll be well-prepared for anything. The book has a lot of merits to it. You just have to see where she is coming from.

I didn't mean to imply that the book didn't have merit. It just stands to reason that any formula meant for 'everyone' is not going to fit 'everyone.'

Where a person is, in terms of earnings, current debts, present savings/investments, age, and many other factors has a lot to do with determining the appropriate numbers.

**PrincessPerky** · 01-13-2007, 11:36 AM

Re: What percentage do you spend on Needs/Wants/Savings?

previously we were at about 70% needs...right now it has gone down closer to 60% due to a raise.

And I agree on how hard it is to quantify a need vs a want, if I called all I could and would do without before asking for public assistance a want, then the real percent would be lower. If on the other hand I called only those generally accepted as a want it would be higher (I never counted a phone as a need..but I like mine)

Anyway, lowering wants is generally easier, if you lowered needs, they wern't all that needful were they

**DivaJen** · 01-13-2007, 11:48 AM

Re: What percentage do you spend on Needs/Wants/Savings?

I just did this roughly the other night. We're roughly 52% needs, 19% savings, 29% wants.

**LivingAlmostLarge** · 01-13-2007, 11:52 AM

Re: What percentage do you spend on Needs/Wants/Savings?

Our needs are high because savings is not savings it's a need. It's a line item that gets paid like taxes to me personally.

So it'd be 95% needs and 5% wants. When my income increases then wants can increase too. But maxing out retirement is a need and so is saving for a car and maxing out ESPP and college savings. They are not savings they are absolutely essential before I end up eating cat food in retirement.

**tinapbeana** · 01-14-2007, 06:32 AM

Re: What percentage do you spend on Needs/Wants/Savings?

Originally posted by Aleta

The reason that she likes to get people down to 50% is because it works for the most part. If you were to lose your job, you would only receive 50 % of your income. Same for disability. So, she's saying that if you can live within this that you'll be well-prepared for anything. The book has a lot of merits to it. You just have to see where she is coming from.

unfortunately, 50% isn't the magical unemployment number many folks assume it is. many states, mine included, have a cap on how much unemployment benefit will be paid out. it is 50% of your salary up to the cap. in my case, anyone making over 30k/year did not get 50% of their salary in unemplyment benefits when they closed our call center down.

if you want your 'needs' to be a dollar amount you oculd afford when on unemployment, call your local unemployment office to find out what their cap is first. you might be surprised to find it is a lot less than you thought/hoped.

**living_in_oz** · 01-14-2007, 07:00 AM

Re: What percentage do you spend on Needs/Wants/Savings?

I'm curious how my spending works out. I'm going a to check in a little bit. But, it seems to be like so many things would fall into a gray area. For instance, dental care. I don't NEED to go to the dentist for a yearly cleaning, but if I don't I can have major dental bills down the time. What about insurance? It's not a need. In fact many many people go without home, car, or health insurance. Which catagory to these items fall into? Anyone know?

**LuxLiving** · 01-14-2007, 07:33 AM

Re: What percentage do you spend on Needs/Wants/Savings?

Used to be a need was food, shelter and clothing.

Now it does get fuzzy w/the manmade have-tos like insurance, automobiles, etc.

Seems it would vary on where you live climate wise and where you live compared to where you work, etc.

A car is not a necessity if you work 5 minutes from home. It wouldn't be necessary to live 30 minutes from work if we were willing to go w/o a car, etc. It wouldn't be necessary to buy everyone a warm coat if we lived on the beach, etc. Twould appear that we could all 'tool-up or down' if we were willing to wobble more on the whereabouts it seems. So, that said, LOTS of stuff are variables.

As another thread speaks of what you won't do, you have to consider what you will do to save money. Will you move closer or farther from viable income sources? Will you wear less costly clothing to work? Will your kids do w/o private lessons? Will you work closer to home like in your own barnyard, orchard or garden to have goods that you don't have to purchase? Most of us are NOT willing to sacrifice our own sweat in order to have someone else do the physical. No, we'll do the mental and earn a bigger paycheck in order to have the same things we could have done for ourselves - if only.

No big judgements here - I'm just sayin'!

Has anyone else here read 'Ishmael' by Daniel Quinn?

What percentage do you spend on Needs/Wants/Savings?