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A Formula for Success (literally, a formula)

Updated: Feb 27

Here is a formula to try to live by:


Income - Savings - Needs = Wants


This seemingly simple formula actually is saying a lot:

- Save first

- Then meet your needs

- Then spend 'what's left'


Saving first ensures it gets done. It requires specific savings goals over multiple time horizons. Paying yourself first is a lifestyle choice that you can make.


Assessing and 'right-sizing' your true 'needs' goes a long way to controlling expenses. Shelter is a 'need'. Some home choices clearly reflect 'wants'. Food is a 'need'. Eating out every meal is a 'want'.


After you saved and met your true needs then you can spend 'what's left'. 'What's left' is a pile of money for discretionary spending. Is this the month you ski or golf or go for a weekend away? Or is this the month for more basic purchases for clothes or a DIY project?


'What's left' sure beats a line-item detailed budget, destined to frustrate and not be followed.

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