I know in modern life, we want to reward ourselves for our hard work and we should, but who are you rewarding? Your past, your present or your future? Even though you may be one person, you are made up of 3 parts. There is the past you who made choices that sometimes affect your present & future selves, there is the current you who is making all the choices now and the future you who will have to live with your past and present choices. When you get your paycheck, any money you spend on current needs (food, rent transportation etc.) is to benefit your present self. When you put money into your 401K/savings/retirement accounts, you are paying money to your future self and when you are paying money to debt, credit cards and loans you are paying money to your past self.
I know you are probably thinking that only equals 90% what about the other 10%? The other 10% belongs to God or Taxes, you can choose to who gets what, but I choose to give God His 10% of the 100% He blessed me with.
So back to the 30%, depending on how generous/stingy your past self was, depends on how long you will need to pay them. At some point, if you are debt free, you are not obligated to pay your past self anymore and then could deserve 60% of what you earn. Once you are at that point, you can decide to stay at that 30% and give your future self a little boost. And further down the line, when your future self becomes your current self, you may be able to deserve 90-100% of what you earn.
For this to happen, your current self needs to take some action. First you need to evaluate your paycheck and see what % is going to your past, what % is going to your present and what % is going to your future.
Second you need to determine for yourself which of your 3 selves needs your attention and see if you can make active changes to get them the attention they need.
If you find that most of your money is going to the past, then your current and future selves will need to learn from that and understand things may need to be a little lean in the present and foreseeable future until you can get rid of your past financial choices. Once they are gone, you can hopefully take all those funds that were going to the past and then start throwing them towards your future so your current self will be able to take a breather from working some point.
If you find that most of your money is going to the present then make sure your realize that present is not forever and at some point you will be come your future self and if you don’t equip your future self with enough, that present life you are enjoying will eventually go away and what ever you left your future self with is what your paycheck will be when you eventually stop working so if it is less than what you are currently living on, then be prepared for some lean years ahead.
If you find that most of your money is going to the future, then congratulations you have a choice at this point. Are you satisfied with your current life living on 30%? If not, up it to 45% for your current and 45% for your future. If you are satisfied and feel that you are fully enjoying life at 30% then you have just given yourself the keys to your future. You can just count down the clock until you hit 25x your annual expenses and decide that you can work, not work, do whatever you want because you are free! Your past, present and future selves are now all in harmony and on the same page, so you deserve all of it.
Once you have gone through your budget, if you find that it is impossible to get to the 30/30/30 then you there are 2 things you can do. Either earn more or spend less. See which you have the desire to do more of. If you have the desire to earn more because you are already living on a razor thin budget, then focus your attention on that. If you find that you are making a good amount and don’t see yourself making more then you need to start focusing your attention on creatively cutting your expenses. Cutting your expenses is twice as valuable as increasing your income.
No matter what you do or how much you make, if you focus on getting to paying your past, present and future selves equally, you will eventually get into that harmony of unlocking the keys to your balanced financial future.