Just this morning I was talking to my son. I was very proud of him when he told me he wasn't going to work overtime at his job. I asked "Why don't you want to work overtime, there is a lot of money to be had?". He replied "Dad... every month I know my monthly expenses and they are all covered. I save diligently for my retirement in my RRSP account. I save for emergencies in my TFSA account. I save for travel and big expenses in my long savings account. I save for "fun things" in my short savings account. Then he said.... after all this I have extra money left over. If I work overtime I just have extra money left over... either way I don't spend it all and if I work overtime I'm so tired and burned out I don't have the energy to say no to useless expenses and my life seems to much less vibrant.

Then he went on to tell me about his co-workers. Dad, my senior coworkers make more money than I do but they are all so broke. I hear about them spending money on eating out, dates, cars, and all sorts of other things. They have no plan, they don't track their expenses and they are always broke. They spend large amounts servicing their credit cards and bad decisions. I'm so glad you taught me to look at every expenditure and ask "is it really necessary, will it make me happy, and how much am I working to pay for it".

I was very proud. My son doesn't take a pencil to a notebook to write down everything. However, he knows his income, he knows his major expenses, he knows how much he watches how much he spends on his discretionary spending and he makes sure to...

Pay himself first.

His savings and bills get paid before he even looks at his bank account balance. That makes a HUGE difference. Plus he identified places where he spent lots before (eating out) and looked at how much he could save by cooking himself and now he is proud that his food budget dropped by 70%.

But the 50:30:20? It is a great guideline but every person is different. For my son with very small needs? He saves far more than is normal. When I was young and my mom spend very wisely and didnt have even money for food sometimes? Saving really wasn't possible other than small amounts for things like Christmas and birthdays and even that was meager.

Every financial situation is different and fixed percentages are little more than a guideline. Looking at all your expenses and understanding where the money is coming in and going out gives you power to control your money. That is the core of your article and I agree with that 100%

Thanks for writing.