General Goals 1) to be debt free in 3.5 years 2) save lots of money

Tuesday, November 23, 2010

The 10 % Rule OR Paying Yourself First

When I first started to read books on personal finance, the one things every book I read had in common was the 10% rule. The 10% rule stipulates that 10% of everything you earn should be put in to some kind of savings. This is also known as paying yourself first. I decided that this was a good idea so I have started this process. Recently I read that you should be calculating 10% of your gross income not your net pay. Prior to reading this I had been putting in calculating based on my net pay. Which doesn't seam like a lot but over time the few extra dollars I'm sure would add up. Prior to last pay I had $425.05 in my 10% account. Last pay I put in another 140.91. This brings my total to $565.96.

10% fund has: $565.96 (425.05+149.01)

Putting the 10% aside was easy but deciding was to do with it has not been. I have had conflicting advice on what to do with it. So for now its just sitting in my money master account. Any advice would be greatly appreciated.

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