SIMPLE: The “50-30-20” Budget Rule of Thumb

Try the 50/30/20 rule OF WANTS, NEEDS AND SAVINGS

By Dr. David Edward Marcinko MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

There are varying opinions on how much of your total income should go toward savings and retirement goals each month. Moreover, the answer is likely to vary, depending on your full financial profile.

But if you’re looking for some basic KISS guidelines, consider applying the 50-30-20 rule, a budgeting method that allocates 50% of your income to essentials, like rent and bills, 30% to discretionary spending and 20% to savings.

Citation: https://www.r2library.com/Resource/Title/0826102549

Image shows a pie chart broken up into 50%, 30%, and 20%. Title reads: "The 50/30/20 Budgeting Rule." Under 50% says "Needs: groceries, housing, utilities, health insurance, car payment." Under 30% reads: "Wants: shopping dining out, hobbies." Under 20% says "Savings"

Your thoughts are appreciated.

THE RULE: https://www.thebalance.com/the-50-30-20-rule-of-thumb-453922

THANK YOU

ZERO BASED BUDGET: https://medicalexecutivepost.com/2021/05/24/the-zero-based-budget-for-physicians/https://medicalexecutivepost.com/2015/07/02/can-doctors-achieve-financial-independence-without-budgeting/

EPI BUDGET FACTS: https://www.epi.org/resources/budget/budget-factsheets/

NO BUDGETS: https://medicalexecutivepost.com/2015/07/02/can-doctors-achieve-financial-independence-without-budgeting/

HOUSEHOLD BUDGET: https://medicalexecutivepost.com/2013/10/07/on-setting-your-household-budget-ugh/

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Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™

ORDER: https://www.routledge.com/Comprehensive-Financial-Planning-Strategies-for-Doctors-and-Advisors-Best/Marcinko-Hetico/p/book/9781482240283

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The “Zero-Based Budget” for Physicians?

Zero-Based Budget

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By Dr. David Edward Marcinko MBA CMP©

SPONSOR: http://www.CertifiedMedicalPlanner.org


A zero-based budget means you start with the absolute essential expenses, and then add expenses from there until you run out of money. This is an extremely effective, yet rigorous exercise for most medical professionals and can be used personally or at the office.

Guess what your first personal financial item should be?

That’s right, retirement plan contributions. Then your mortgage and other debt payments, and other required fixed expenses. From the office perspective, the first budget item should be salary expenses, both your own and your staff.

Operating assets and other big ticket items come next, followed by the more significant items on your net income statement.

Some doctors even review their P&L statements quarterly, line by line, in an effort to reduce expenses. Then add discretionary personal or business expenses that you have some control over.

P&L: https://medicalexecutivepost.com/2008/03/18/net-income-pl-statement/

Do you run out of money before you reach the end of the month, quarter, or year? 

Then you better cut back on entertainment at home or that fancy new, but unproven piece of office or medical equipment.  This sounds Draconian until you remind yourself that your choice is either a) entertainment now but no money later, or b) living a simpler lifestyle now as you invest so you’re able to enjoy yourself at retirement.

Risks: https://medicalexecutivepost.com/2017/10/18/on-retirement-planning-risks/

Zero-Based Budgeting: The Ultimate Guide - MintLife Blog

Why?

When you were a young doctor, it may have been a difficult trade-off. But at mid-life, you’re staring ultimate retirement in the face.

ASSESSMENT: Your thoughts are appreciated.

INVITE DR. MARCINKO: https://medicalexecutivepost.com/dr-david-marcinkos-bookings/

THANK YOU

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What is a Zero-Based Budget?

A Most Cruel – but Needed – Endeavor

[By Staff Reporters]fp-book2

A zero-based budget means you start with the absolute essential expenses and then add-back expenses from there until you run out of money. This is an extremely effective, yet rigorous, exercise for most doctors and medical professionals; and can be used personally or at the office.

Triage and Prioritize

Your first personal financial item should be retirement plan contributions, then your mortgage and other debt payments, and then other required fixed expenses. From the office perspective, the first budget item should be salary expenses for both you and your staff. Operating assets and other big ticket items come next, followed by the more significant items on your net income statement. Some doctors even review their P&L statements quarterly, line by line, in an effort to reduce expenses. Then, you add discretionary personal or business expenses that you have some control over.

More Month than Money

Now, do you run out of money before you reach the end of the month, quarter, or year? Then you better cut back on entertainment at home or that fancy new, but unproven piece of office or medical equipment. This sounds Draconian until you remind yourself that your choice is either (1) entertainment now but no money later or; (2) living a simpler lifestyle now as you invest so you’re able to enjoy yourself at retirement.

Assessment

When you were a young doctor, budgeting may have seemed a task needed far into the future; but at midlife, you are staring retirement right in the face.

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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