Budget allocation

gallygirl

getmore4less wrote: »

The 1/3 1/4 is based on 20-25 years, house paid, kids independent.
If you work on a longer term to match pensions timescales you have some leeway on the mix, and it can be variable mix over time it's a long term plan.

Personally I don't agree with the split income theories - if I had paid attention to them I'd still be working now. I'd turn it on it's head - what are your long term and medium term plans, how much do you need to fund that in total then work backwards and see how much it equates to every month.

For example, someone who is naturally very frugal and doesn't have expensive hobbies/future plans would need to accumulate less overall but would be able to accumulate it quicker than someone else on the same salary but with a more expensive current and planned future lifestyle. I'm thinking of someone on Mr MM who paid off his mortgage a few years ago and is now saving for FIRE - this week he'll have covered all his costs for the year so all his subsequent pay days are solely for investment :T . (In reality though he's spreading it out over the year).

However, regardless of what route you take, the important thing is to spend mindfully and you're getting there :T.

getmore4less

The split was based on a retire in 10 years scenario but relies on good investment returns, does not have a lot of safety margin and property will be compromise.

20 years is very realistic.

If you get your basics in place by 30 you can have a retire at 50 plan with a fallback of 55.