The 10-10-10 Principle

In cruising around the blogosphere, I stumbled upon Dave Ramsay’s 10-10-10 principle. And being just the type of person to cherish any kind of arbitrary, if firm principle, I immediately rushed to check myself against his. And found myself… yes, lacking.

The Principle is based on the notion of saving 30% of your income… 10% to retirement, 10% to an emergency fund, and 10% to saving for future fun purchases. I only made the cut on retirement.

Me:
__ 6% Pretax +8% Post-Tax for Retirement
__4% Post-Tax on Emergencys
__4% Post-Tax on Fun future purchases

I also save about 6% on a cash-value life insurance policy which I’m using as a mid-term investment (kid’s college one day, far far away I imagine), which doesn’t fold into the 10-10-10 principle as described. So all in all, if I included this as well, I think I would just need to increase my savings to another 6% to meet the full criterion. But starting small, as I usually do, it will be my goal to move my Emergency Fund Savings up first. If I can move my automatic withdrawls up another $60, I will move it up 2% there!