Start with saving; the spending will follow - "The 60% Solution"

By MP Dunleavey

It's part budget and part financial philosophy, and it works like this:

* Keep your monthly committed expenses, including taxes, to about 60% of your gross income.

* Save 10% for retirement and 10% for long-term expenses, such as a down payment, new car, major home repair or other big, infrequent purchase.

* Set aside an additional 10% for smaller, irregular expenses, such as a new appliance, minor home and car repairs, or a new battery for your laptop.

* Use the 10% left over for wild, crazy parties (or anything else that strikes your fancy).

The beauty of this system, in theory, is that it covers spending AND saving. But the trouble is, everyone in the group got stressed out about the idea of trying to pare down monthly spending commitments to 60%. That's not surprising, given that some of us were, until recently, spending more than 100% of our incomes and racking up debt.

READ THE ARTICLE:
Start with saving; the spending will follow - MSN Money