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A part of money management is knowing how to spend the money that you do have. So, after tracking your money and seeing where your money is going, what’s the ideal way in which you want to spend your money so that it benefits you and your family…especially in the long run? Well, as with many things in life there is a rule for spending your money, which can prove to be quite helpful in terms of keeping your finances in order. It is called the 70 10 10 10 Rule.

What is the 70 10 10 10 Rule?

The 70 10 10 10 Rule means that whatever income you get, you split that income up into the following portions:

  • 70% goes towards your expenses.
  • 10% goes towards savings.
  • 10% goes towards charity.
  • 10% goes towards investments.

Thus, 100% of your income is allotted for.

Now, I know…for most people, once you’ve been tracking your money, you will realize that your expenses allot for way more than 70%…the truth is, you’re probably at about 90%…so right now this 70 10 10 10 thing is not looking feasible for you.

No worries. Most people will have to make lifestyle changes before they can get to the 70 10 10 10. Remember, this rule is a benchmark for you…it lets you know that:

  • you are keeping your expenses within a certain level,
  • you have money for charity,
  • you have money to invest,
  • you have savings put away.

In order to get to this benchmark, you probably have other steps to overcome first, like:

Change is a process, so please do not be discouraged because it will take time to better your finances. Everything takes time…just be consistent and don’t give up.

The 70% – Your Expenses

The 70% - Your Expenses

When it comes to your expenses, your aim or benchmark is 70% of your income. Therefore, if you make USD$3,000 per month, then the aim is for you to spend only $2,100 on your expenses. If you can spend less, then great…but the aim is to not spend more.

Expenses include your:

  • rent/mortgage,
  • transportation (including your car note),
  • loans & other debt payments,
  • food,
  • clothing,
  • entertainment, etc.

Right now, you may be thinking…how on earth can I reduce my expenses?

  1. Well, firstly, track your money and see the areas that you are currently spending on that are unnecessary or you can honestly do without. Quicken or Moneyspire are examples of software that you can use to help you track your spending.
  2. Secondly, maybe your reality is that you just can’t reduce your expenses, therefore you will have to increase your income, actively or passively. Check out these two articles that can help you get started:

The First 10% – Savings

As a family caregiver, you know how important it is to have savings.

This could be an emergency fund for all those unexpected life events, e.g., this month you may have to pay an unplanned visit to the pharmacy to pick up some over-the-counter drugs or medical supplies.

Or, you may need to put aside savings for you to use for professional development, e.g., an online course that will certify you in your career field OR just an online course that will help you develop in general, e.g., a Masterclass in Entrepreneurship.

You could also want to save for specific things like your car maintenance, personal entertainment (like going out to the movies), a mini-vacation, etc. You may just want to know that in the event you need funds for things outside of your everyday living, you have it.

The point is, there are many reasons to have savings and you can have more than one savings account if that helps you to not get things mixed up.

  • So, for example, you can have an emergency fund, which you can stipulate should not go below USD$1,000, and then you can have another account for any of the above mentioned categories, e.g., professional development courses.


  • you can have one account for savings. The minimum amount for emergency in that account is USD$1,000 (as an example) and therefore, anything in excess of the USD$1,000 can go towards something else like your professional development.

The choice as to how you do your savings is up to you…just ensure that you are able to track the required amounts.

The Second 10% – Investments

The Second 10% - Investments

Think of investments as activities that you do that generate an income stream, whether active or passive. As a family caregiver, you may lean more towards the passive income side, as your aim may be to quit your “9 to 5” and have money coming in without you having to report to a job every day. This is understandable, as you wish to have the flexibility to work hours that you can dictate and thus, be able to spend time with your loved ones when you want, without having to battle your coworkers for vacation leave.

Investments can be done in various ways:

  • you can invest in stocks and get paid dividends;
  • you can invest in a business of your own and get income from that business;
  • you can write a book and get royalties, etc.

The point is there are various ways to make investments but all investments require money. Yes, we know you can use other people’s money to make money…but that’s not what this article is about…and let’s be real, most family caregivers who are just trying their hand at investing have no idea how to leverage other people’s money, nor do we know anybody with cash lying around to give us or anybody who would trust us to turn a profit as we are just starting out in whatever area we have chosen.

So, more than likely, you will need your own cash to start out small at whatever wealth creation vehicle that you chose to employ. Therefore, this 10% of your current income that you are saving is solely for investment activities and the whole point of investing is to generate multiple income streams that are consistent, so that you can confidently walk away from your current job.

The Third 10% – Charity

For various reasons, religious or otherwise, persons strongly believe in giving back to society. Therefore, persons want to know that they can freely give without worrying about if they have the money to do so or not. By getting to the point where you consistently set aside 10% of your income for charity, you can rest assure that you have cash for:

  • tithing,
  • feeding the homeless,
  • donating to local organizations/foundations,
  • helping out persons you meet that may be in need, e.g., a coworker who needs bus fare.

Giving back helps you also, as it makes you feel good to know that you are making a positive difference in someone else’s life (outside of your family), which in turn can give you new hope for each day…which helps us with our overall mental health.

Apply the 70 10 10 10 Rule

Apply the 70 10 10 10 Rule

Do you now see the value of spending your money according to the 70 10 10 10 rule? This rule is a good starting point for family caregivers who are not sure as to how to exactly portion out their income (budget). It presents a scenario that is feasible for most people and that will allow them the ability to handle emergencies and take advantage of opportunities to better their lives.

Please note that the 70 10 10 10 rule is just a starting point for you…it is not fixed in stone. You may realize that based on your priorities, needs and wishes, you may need to adjust this rule to probably:

  • 75 – Expenses
  • 10 – Savings
  • 10 – Investments
  • 5 – Charity

or some other version…it all depends on your situation.

Whatever is best for you and your family…do it. We truly hope that the 70 10 10 10 rule helps you to better manage your finances. Best of luck!

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