I paid it off. (Before you congratulate me, I'd like to remind you that I imagine this must be how it feels getting released from prison.)

But now there's $1100/month that I was paying toward that monster, that now will be going to other things. I read an article recently (by chance), where the advice giver said to split your income in three pieces: 20% for retirement savings, 50% for living expenses, and 30% for fun...

So the question is whether those are good figures. A related question is that I have some serious home improvement to do, which kinda messes with that plan.

I plan on seeing a financial planner in the new year, but I'd like your thoughts on how to prepare for that, and my other questions...

  • 3
    20/50/30 is a bit simplistic, as long-term one-time expenses don't really fit into either "living expenses" or "fun". The numbers are less important than the idea that you should dedicate some amount for retirement (the exact amount depends on what you currently make and your anticipated requirement costs), some amount for your bills now, some amount for later (like home improvement), while recognizing setting aside some for entertainment is just as important as not blowing everything on fun as soon as you earn it.
    – chepner
    Commented Dec 23, 2021 at 13:51
  • 1
    Which is to say: you need to decide what you want and need before you can start allocating money towards each goal.
    – chepner
    Commented Dec 23, 2021 at 13:52
  • @chepner I don't plan on blowing it, which is why I guess I need to figure this all out, so that I don't blow it all. I need to both maintain the discipline and be able to loosen up a bit. Thanks for helping me think it through a little bit more :-)
    – NovaDev
    Commented Dec 23, 2021 at 14:45
  • 2
    Are you debt-free now? How big is your emergency fund (in terms of months it will cover your expenses)? Are you already maxing out contributions to tax-advantaged retirement accounts? Just a few pertinent questions, there are many others that would be relevant in order to make a proper plan.
    – Hart CO
    Commented Dec 23, 2021 at 14:46
  • Buy up to $10k in series I bonds before the year ends? You won't be able to touch it for a year, but I think it gains at least 7% APY till April.
    – user541686
    Commented Dec 23, 2021 at 22:28

1 Answer 1


You should analyze your remaining financial goals and push that money towards those. For example,

  • Do you have any remaining debt? Snowballing funds allocated to your student loans into those debts will make them disappear all that much faster.
  • Are you contributing what you'd like towards retirement? It's typically recommended that you contribute ~15%, but your finances may require something different.
  • Do you have an adequate emergency fund? Saving up 3-6 months of expenses is recommended, depending on your employment stability.
  • Are you currently renting and would like to become a homeowner? That money could start going towards a down payment for a house.
  • Have hobbies you'd like to do more with? Add a few bucks into your monthly budget. Having a plan doesn't mean you can't have fun!

These are just some starting points. As always, I like pointing people towards this amazing flowchart from /r/personalfinance:

The /r/personalfinance prime directive flowchart

  • Wow, there is so much I disagree with on that chart. But it's not your chart. Commented Dec 25, 2021 at 5:51
  • 1
    @Harper mind sharing your thoughts on it? I have found it to be a decent guideline, but everyone's finances are different and I'm curious what your disagreements with it are Commented Dec 26, 2021 at 21:43

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .