How You Should Be Spending Your Money, According to a Financial Planner

iStock
iStock

It would be nice if financial rules of thumb applied to everyone equally, but that's often not the case. People in different income brackets have different priorities, which is why telling everyone they should be spending a flat percentage of their income on necessities like food, housing, and transportation doesn't always make sense. In his book Rules to Riches, financial planner Mark Baird accounts for this variation by adjusting the common percentage guidelines based on income levels, as CNBC reports.

In some spending categories, the rules stay the same no matter how much you're making. Baird recommends that every household earning between $25,000 and $300,000 annually save or invest 5 to 20 percent of their income each year, for instance.

Other financial areas have more variation depending on how much money you're bringing in, though. If your income is $25,000 a year, Baird says you should be spending 18 to 23 percent of your earnings on housing. But if you make $50,000 or more, you should aim to spend 15 to 20 percent. In general, people earning lower salaries should set aside higher percentages of their income for food, clothing, transportation, and medical bills, while those earning more money should plan to spend more of it on taxes, insurance, and charitable donations.

As is the case with any spending-related guidelines, these recommendations shouldn't be taken as law. The money you put toward housing, taxes, and transportation will vary depending on where you live. If costs are especially high for one bill, see if you can cut spending in another part of your life. It's not the end of the world if you spend slightly less on charitable contributions than Baird recommends.

Check out the guidelines for households making $50,000 a year below. You can head over to CNBC for the full chart.

Taxes: 20 percent
Charitable Contributions: 10 percent
Savings and Investments: 5 to 20 percent
Housing: 15 to 20 percent
Transportation: 8 to 10 percent
Food and Beverage: 6 to 10 percent
Clothing: 3 to 5 percent
Furnishings: 2 to 4 percent
Personal Care and Cash: 3 to 5 percent
Medical and Dental: 3 to 5 percent
Insurance: 6 to 8 percent
Education and Self Improvement: 1 to 2 percent
Installment Payments: 3 to 4 percent
Entertainment, Dining, and Gifts: 1 to 3 percent
Vacations and Holidays: 2 to 4 percent
Miscellaneous: 1 to 2 percent

[h/t CNBC]

Looking to Downsize? You Can Buy a 5-Room DIY Cabin on Amazon for Less Than $33,000

Five rooms of one's own.
Five rooms of one's own.
Allwood/Amazon

If you’ve already mastered DIY houses for birds and dogs, maybe it’s time you built one for yourself.

As Simplemost reports, there are a number of house kits that you can order on Amazon, and the Allwood Avalon Cabin Kit is one of the quaintest—and, at $32,990, most affordable—options. The 540-square-foot structure has enough space for a kitchen, a bathroom, a bedroom, and a sitting room—and there’s an additional 218-square-foot loft with the potential to be the coziest reading nook of all time.

You can opt for three larger rooms if you're willing to skip the kitchen and bathroom.Allwood/Amazon

The construction process might not be a great idea for someone who’s never picked up a hammer, but you don’t need an architectural degree to tackle it. Step-by-step instructions and all materials are included, so it’s a little like a high-level IKEA project. According to the Amazon listing, it takes two adults about a week to complete. Since the Nordic wood walls are reinforced with steel rods, the house can withstand winds up to 120 mph, and you can pay an extra $1000 to upgrade from double-glass windows and doors to triple-glass for added fortification.

Sadly, the cool ceiling lamp is not included.Allwood/Amazon

Though everything you need for the shell of the house comes in the kit, you will need to purchase whatever goes inside it: toilet, shower, sink, stove, insulation, and all other furnishings. You can also customize the blueprint to fit your own plans for the space; maybe, for example, you’re going to use the house as a small event venue, and you’d rather have two or three large, airy rooms and no kitchen or bedroom.

Intrigued? Find out more here.

[h/t Simplemost]

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The U.S. Postal Service Is Struggling—Buying Stamps Can Help

Inclement weather doesn't stop them, but a lack of funding could.
Inclement weather doesn't stop them, but a lack of funding could.
Pope Moysuh, Unsplash

Throughout the coronavirus pandemic, businesses have drastically reduced the number of advertisements and other marketing materials they’re sending to consumers—and since a considerable chunk of the U.S. Postal Service’s (USPS) revenue comes from those large mailings, the ongoing crisis has put the organization in a tough spot.

The importance of keeping the USPS afloat goes beyond simply wanting to preserve something that’s been around since the dawn of U.S. history. As Lifehacker explains, the institution delivers mail to every single household in the nation—be it by truck, boat, or even mule—which makes it a critical method of circulating necessary documents like paychecks and voting ballots. Without the USPS, it would be difficult to reach rural residents who might not have consistent phone or internet service.

So, how can we help? The USPS doesn’t get any taxpayer funds, relying instead on the sale of stamps and various shipping supplies. In other words, the best way to put money into the pockets of our postal guardians is to stock up on stamps.

There are dozens of different designs listed on USPS’s online store, which makes this charitable endeavor an especially fun one. You can, for example, decorate your envelope with Sally Ride, Scooby-Doo, or celebrated broadcast journalist Gwen Ifill. There are plenty of fruits and flowers to choose from, too, and even a lovely illustration of Walt Whitman, complete with a very thick mustache and a very piercing gaze. And we’d be remiss not to mention the existence of this mail carrier dog costume, which only costs $18.

An American hero.USPS.com

If you’d like to go the extra mile, you can also sign a petition to save the USPS by texting “USPS” to the number 50409. A chat program called Resistbot will walk you through the steps to add your name, and it’ll even send an automated message to your senators, letting them know you’ve signed the petition and support the continued operation of the USPS. You will have to enter your name, email address, and residential address, but the whole process takes about two minutes.

[h/t Lifehacker]