Friday, July 11, 2014

The 10-20-70 Rule

Prior to setting my foot in going abroad and with the knowledge of how much I will earn, I prepared a detailed excel spreadsheet of how much of my monthly salary will be allocated to paying my house mortgage, monthly allowance/allocation for my parents, food, rent and other possible expenses that I may incur.  I never had put aside something for savings/investments on my spreadsheet, because I have lack of knowledge about the investment instruments that I can possibly get into. The topmost priority during that time was instead of paying my house for 21 years, I will strive to achieve to pay it within my 3-year contract abroad.
Armed with this, I had myself ready for my financial and career journey.
But eeeeek!

My happy feet was always tickled by all of the places in Europe that I can travel and discover. It was not part of the "financial" plan. My older brother has to "spunk" me whenever we chat online and remind me of the VIRTUE of delayed gratification. I did practice DG. I waited for 1.5 years before I embark on my travel journeysssss. =D
Well, 3.5 years after I made my excel spreadsheet (which I continually update every year), I am grateful to be debt-free (yes, the house has now been fully paid) and am now knowledgeable and engaged into various investments (paper assets, online entrepreneurship and rental property). I have also given seminars on encouraging fellow Filipinos abroad to start to manage their personal finances and get into various investment vehicles in the country. I have come to realise that there is just a basic formula to start on (the first monitoring spreadsheet I did was so tedious that I list down my every expense with the corresponding receipts. So much for my auditor blood!)
The formula is: The 10-20-70 RULE
10% - Giving Fund
20% - Investment Funds
70% - Living the Life Funds
All the percentage is based on gross salary (I had to workback the social security and tax percentages netted off my salary and concluded that I can still manage my finances.)
The 10% Giving Fund - I am still in the process of "walking the talk" for this. I am positive that I can do the tithing! My family in the Philippines serve in the Sacred Heart Seminary Church, and I plan to coordinate to sponsor a seminarian into priesthood. I am also blessed by the Sunday TV Mass conducted by Fr. Mario Sobrejuanite in Megamall. They include the bank accounts for donation and I plan to set aside a portion to give to them. The Kerygma Family community has been my online support for years now (where I also meet wonderful and amazing people online who love to serve the Lord). Though I am far away, prayers and monetary help can help sustain their activities to continually be a blessing to others. Here abroad, I am part of the choir who sing in our local parish, so setting aside a portion of my money to host choir practice at our apartment will also be part of the Giving Fund.
"You must set aside a tithe of your crops—one-tenth of all the crops you harvest each year." - Deuteronomy 14:22
The 20% Investment Fund - I plan to save up enough cash for a downpayment to get an apartment house or a townhouse here abroad (time horizon to get a house is 7-8 years from now). The rent here in this "holiday country" is significantly high and eats up most of my Living the Life Fund. So, a house later on to serve as a capital asset is a good idea for investment/retirement fund (for rental/sale later on, while my family and I are back to the tropical country and I can work as an advocate or consultant). =D I am also interested in global investing (so anyone who got knowledge about this, feel free to comment below!). Portion of this fund is also allotted for my future kid's college education fund. Once I start investing a small portion now, it will be ready for use at least 18 years from now (in case I get pregnant by tomorrow. Hahahaha!). A short-term goal for a portion of this fund is for my Wedding Fund. Like every woman here, I am misty-eyed and giggly happy by the thought of walking down the aisle in the not so distant future. :)
The 70% Living the Life Fund - It speaks for itself. My 6% social security, 19% tax, xx% rent, food, recreation activities, and everything else fall on this fund.
I look forward to the next journey ahead.
A blessed weekend to all!
Love Lots,


  1. I should practice that 10-20-70 rule, very sensible. Maybe after I finish paying for a few loans next year. :)

    1. Hi edelweiza, I stick with percentages because they can easily be managed (I did detailed excel worksheets when I was starting up with budgeting, and it was quiet exhausting). Good luck with the loan repayments. You can surely do it!:)


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