Sixty-Percent Solution

You’ve heard me talk about the 85 Percent Solution, which focuses on getting most of the way there rather than 100 percent and ending up doing nothing at all. Well, Richard Jenkins, the editor-in-chief of MSN Money, wrote an article called “The 60 Percent Solution,” which suggested that you split your money into simple buckets, with the largest being basic expenses (food, bills, taxes) making up 60 percent of your gross income. The remaining 40 percent would be split four ways:

1. Retirement savings (10 percent)
2. Long-term savings (10 percent)
3. Short-term savings for irregular expenses (10 percent)
4. Fun money (10 percent)

The article has been widely distributed, although curiously, none of my friends had heard of it. The Conscious Spending Plan relates to Jenkins’s 60 percent solution, but it’s more focused toward young people. We spend a huge amount on eating out and going out, whereas our housing costs are lower because we can share apartments and rent more comfortably than older people with families.