LearnVest Planning founder and author Alexa Von Tobel shares her budget secret and it doesn’t involve giving up your daily latte. “Yes, improving the little things—saving a dollar on the cheaper yogurt, skipping our afternoon latte or walking a mile instead of taking a cab—can make us feel like we’re in control of our money, but often we’re missing the forest for the trees,” Von Tobel writes in her new book Financially Fearless: The LearnVest Program for Taking Control of Your Money, recently named to the New York Times best-seller list.
Alexa Von Tobel’s 50/20/30 rule:
Fifty percent of your total monthly income is for essentials such as rent/mortgage (which in itself should be 30 percent of this 50), groceries, utilities and transportation. Eating out isn’t on this list, nor is an annual beach vacay.
Twenty percent is the future or financial priorities such as paying off debt, building an emergency fund and saving for retirement.
Thirty percent is lifestyle—the fun stuff—such as restaurants, shopping, entertainment and personal care.
“Money is your lifeline,” Von Tobel told SUCCESS in July before the launch of a new financial education program called the 7-Step Action Program. “It touches everything and bleeds into everything. Financial planning shouldn’t be just for the wealthy. It should be a right for everyone.”