How does everyone feel about the 60% solution?

The 60% solution is broken down accordingly:

10% pre tax into 401(k) 10% pre tax into long term savings (either tied into the stocks or in a high yield savings account. This money would be for saving up for larger purchases, i.e. a house or a new car) 10% pre tax into irregular spending (this is for those irregular yet predictable expenses. i.e. oil changes or tire rotations, Christmas or birthday gifts, etcetera) 10% pre tax into “fun money” (this would be for dining out or going into the movies or other similar expenses)

The remaining 60% is what you’d have to live off of, including taxes. This can be further broken down into 25% for taxes, 35% for mortgage/rent, car loan, insurance, groceries, etcetera.

From my calculations, living off of 35% of your income is doable, even if it isn’t the most comfortable lifestyle. I think that the living below your means line of thinking fits into this pretty well.

Source: http://web.utah.edu/basford/personalfinance/handouts/budgeting/The60Solution.htm

tl;dr 40% of income goes into savings of some sort, 25% into taxes, and the remaining 35% into living expenses.