Reading Time: 6 minutes The 60 30 10 rule budget is a simple but highly structured budgeting strategy. It is a budgeting tool for people striving to achieve their long-term goals and to help individuals overcome their impulsive spending habits. The 60 30 10 rule budget achieves this by encouraging individuals to put aside 60% of their income for a better tomorrow. This article will go over the 60 30 10 rule budget and explain why it is the perfect budgeting tool for long-term goals and impulsive spending. What Is The 60 30 10 Rule Budget? Let’s add more clarity through an example. Let’s say your take-home pay is $7,000. Judging by the framework of the budgeting strategy, 60% of your pay should be invested, saved, or used to pay off debt. That equates to $4,200. 30%, or $2,100, of your income should cover necessities, while the remaining 10%, or $700, goes to personal expenses. Is The 60 30 10 Rule Budget Right For You? We can’t stress enough that this budgeting rule is made for people with strong wills who are dedicated and disciplined enough to save or invest 60% of their monthly income. The 60 30 10 rule budget has a single goal – making tomorrow easier and better. To keep up with the 60 30 10 budget rule, you will have to quit certain wants and guilty pleasures, and you will have to say NO more frequently than you are used to. You might have to skip that new movie at the cinema, say no to your friends when they call you for a drink two nights in a row, or go to that museum you wanted to visit. Instead, you will be solely focused on improving your personal finance. This sounds quite strict, but the 60 30 10 budget rule will make your life much easier. The 60 30 10 budget rule enables more money to be saved or appropriately invested. It will help you achieve the goals you’ve always wanted, such as becoming a homeowner, being prepared for dark days, or putting your kids through college. At the end of the day, it’s a simple decision, do you want a better today or a better tomorrow? Advantages And Disadvantages Of The 60 30 10 Rule Budget As with any budgeting method, it all comes down to comparing the advantages and disadvantages to make a decision. The 60 30 10 rule is similar to others in that view. Therefore, here are the advantages and disadvantages of the 60 30 10 budgeting rule: Advantages Of the 60 30 10 Rule Disadvantages Of the 60 30 10 Rule Other Types Of Budgeting The 60 30 10 budget isn’t the only budgeting rule out there. There are plenty of other budgeting options that might do wonders for you. Here are a couple of different budgeting rules for you to consider: Is the 60 30 10 Rule Budget For You? Budgeting tools are numerous and vary, as mentioned in the previous section. Therefore, before you decide on the 60-30-10 rule budget, you must determine if it is right for you. Here are a few points that best illustrate if the 60 30 10 rule budget is for you: If you fulfill some or most of these points, the 60 30 10 rule budget is for you. Even if you’re not ready to allocate 60% of your income towards a goal, you can always be flexible and modify the rule to best suit your financial power. How to Get Started With the 60 30 10 Budget? Using a budget strategy to reach your financial goals and targets is simple. All you need to do is follow these steps: Step 1: Calculate Your Income Calculating your income is the first step to using the 60 30 10 rule budget. Bear in mind that you must do the calculations after tax. To begin, add all of your monthly income. This includes income from your primary job, side hustles, and other sources, such as renting an apartment.  Step 2: Calculate Your Spending Similarly, you must calculate how much you spend and on what. Doing this is tricky, as we’re never fully sure where our money goes unless we pay strictly with a card. Nevertheless, it’s something you have to figure out. You can log in to your bank account and go back a month to calculate your credit/debit card spending. If you’re paying with cash, review your receipts to gain a somewhat full picture.  Step 3: Set Up a Financial Goal The most crucial step to using the 60 30 10 rule budget is to work towards achieving a financial goal. But to do that, you must first have a financial goal in place. So, start by outlining a big financial goal you wish to accomplish. A few examples could include: Step 4: Categorize Into Three Groups By now, you probably have a rough picture of how much you earn versus how much you spend. So in this step, we will focus on where your money should go. To do that, categorize your money into three groups. Those are: Remember that you should put 60% of your income into this group.  This should account for at most 30% of your income. If it goes above 30%, look for ways to cut on necessities. While that might sound difficult, an example would be canceling subscriptions, reducing electricity usage, lowering housing expenses, etc.  The “wants” group accounts for money you can spend on stuff you want for yourself. Despite wanting to achieve your long-term financial goals, treat yourself to nice things occasionally, but make sure it doesn’t exceed 10% of your income.  Step 5: Evaluate Each Category We’re not done yet; you’ll need to evaluate each category once or twice before making it stick. This is the step that helps you determine if you can stick to the percentages of the budget.  Creating a budget isn’t easy, as you’re never 100% certain of your spending and income, especially if you’re also working part-time or have a business

Reading Time: 5 minutes Where you live can impact many aspects of your everyday life. Many people, for example, realize that their finances will be affected. However, some fail to understand that their contentment is also among these aspects. That’s where today’s topic comes into play. HCOL and LCOL are two acronyms that may not mean a lot to you right now, but in a paragraph or two, you will realize precisely why people should be concerned about their cost of living. KEY TAKEAWAYS What Do HCOL And LCOL Mean? To avoid any confusion that may arise from the terms HCOL and LCOL, we will look at them both in isolation and concerning one another, and a short mention of what is MCOL. HCOL Meaning The term HCOL means high cost of living. That is precisely why terms such as HCOL area and HCOL cities get thrown around so often. The variables considered include median home, gas, and food prices (among other factors). As it would be near impossible to categorize cities without a frame of reference, most cost of living indices compare sets of cities. Still, some cities are so notoriously high-cost that they can be considered HCOL cities even in isolation. One example of a HCOL city is New York, and an example of a HCOL area could be Manhattan. We’ll look into the numbers later on. LCOL Meaning LCOL is the opposite of HCOL, and stands for low cost of living. Likewise, in LCOL areas and cities, living costs are objectively low. Similar to HCOL cities, some cities are known for being low-cost, even in isolation. One such LCOL city is Mississippi, while a LCOL area can be Holmes County. MCOL Meaning Wherever there’s a high, there’s also a low. Naturally, there also has to be something in between. In this case, that would be MCOL, which refers to medium living costs. It would include MCOL areas that do not belong in either of the two categories mentioned before. HCOL VS LCOL Comparison There are numerous ways in which the terms HCOL and LCOL impact our everyday lives. Even people unaware of the terms refer to the idea of living costs. As expected, a HCOL area can come with its benefits and drawbacks, similar to how LCOL cities can have their pros and cons. Consequently, we will be looking into what the terms HCOL and LCOL entail in practice. HCOL – Pros and Cons First, we’ll cover the pros and cons of living in HCOL cities. Among the most famous HCOL cities (or states) is New York. As we mentioned, a specific HCOL area within New York is Manhattan, where the cost of living index is roughly 237% above the nation’s average. Therefore, life in New York will cost more compared to other places. While you might be able to become financially independent sooner, there will be fewer opportunities to save up and invest. You should also be aware that HCOL cities often have high unemployment rates, as is with New York’s rate of 6.6% (almost double the national 3.5%). Nevertheless, if you make a decent living, HCOL cities offer a robust lifestyle and quality infrastructure. These pros and cons apply to numerous HCOL cities found on Mercer’s 2022 Cost of Living Ranking, such as Hong Kong (1), Zurich (2), New York (7), Tokyo (9), and Beijing (10). LCOL – Pros and Cons LCOL cities, on the other hand, are the exact opposite. Besides spending less money on average, you can expect to avoid many issues brought about by stressful work environments and long hours, such as depression, fatigue, diabetes, and even addiction. With the rise in remote work, you can save and invest significantly more than if you lived in a HCOL area. There are, however, some downsides to living in a LCOL city. Local job opportunities will be rare and generally less stable than those in a HCOL area. Suddenly, even minor economic shifts can affect your everyday life. The previously mentioned would hold for countries ranked lower on Mercer’s 2022 Cost of Living Ranking, like Calgary (141), Cairo (154), Warsaw (174), Budapest (180), and Cape Town (194). HCOL VS LCOL USA Comparison Even in the US, HCOL and LCOL states share the same pros and cons. HCOL areas offer a more stressful way of life but more growth opportunities, while LCOL areas offer the exact opposite. In terms of the cost of living index, Mississippi (84.5), Oklahoma (86.7), Alabama (87.1), Kansas (87.3), and Iowa (88.2) rank the lowest. These states are textbook examples of LCOL living. For them, this ranking is due to their relatively low grocery, housing, utilities, transportation, and health costs. Compared to many HCOL states, your average expenses can be over 40% lower. On the other hand, Hawaii (186.0), the District of Columbia (153.4), Massachusetts (149.9), California (138.7), and New York (135.7) are on the top of the list. Some of their index scores, such as those related to grocery and housing, are nearly double the average 90.1. HCOL VS LCOL: How Can You Know Which One To Choose While HCOL and LCOL areas have benefits and drawbacks, the criteria are relatively objective. It means that the top HCOL cities are considerably more expensive than LCOL cities. As a result, the choice of whether or not to live in a HCOL or LCOL city is quite hard to make. However, these questions can help you decide First of all, can you work remotely? If you can, you may reap the benefits of living in a LCOL area with the salary of a person living in a HCOL area. That can ensure lots of investment opportunities that you may not have otherwise. Second of all, do you want to live in a big city? If you wish to try your hand at life in the big city, the costs of living in a HCOL area could be more bearable. After all, no pros of living in a LCOL area are worth it if you are