If you tell me how much money you save and give away each year, I can tell you how much you’re spending.

Your money can only go four places. You can pay your taxes with it, you can spend it, you can save it, or you can give it away. But most people don’t consciously think about where their money goes. They think they give a little bit, they think they save, they usually don’t realize how much they’re spending, but they do pay taxes. You have to pay your taxes or else bad things happen, so let’s just assume you pay your taxes ;)

What often happens is behaviorally we end up spending money. We spend money on things we want to spend money on, like things we want to do and have (hopefully), and usually saving and giving are afterthoughts.

So how much should you be saving and giving? A good rule of thumb is to save about 20% and use 10% as a starting point for giving. The amount you give can be much higher depending on the lifestyle you choose for yourself and your family.

It’s always a good idea to take a look at how you’re allocating your money. If you’re not sure about how much of your money is going where, let me know by scheduling an appointment below! I’d love to take a look.