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Remember the fun of the teeter-totter as a small child? I vividly remember playing at the park with friends. It was either a thrilling, fun experience or a tragedy. There was no in between. Things worked well when the weight of each child on each end was fairly equivalent. If not, our playtime often ended in a body-jolting, heart-thumping experience. With unequal weights, it could be a constant challenge to keep the momentum going. The heaviest kid would end up on the ground with a thud while the lighter one went flying through the air (though not with “the greatest of ease like the man on the flying trapeze”!)

Our finances are a lot like the teeter-totter. When major “weights” are balanced, it’s much easier to keep the positive momentum going. The first weight we balance is priorities (give/save/live). Once we know what we will allocate to the “live” priority, there’s a second set of balanced weights. I like to call them the Big 3: housing, transportation and food. You know, those “necessary” expenses to keep ourselves and our family sheltered, feed and transported to all their activities!

Through years of working with families and learning from the experience of Crown Financial Ministries and Dave Ramsey, I’ve discovered a simple rule of thumb for the Big 3. If I can arrange those necessary expenses (housing, transportation, food) so that they represent not more than 55% of my “live” money (the portion after give & save), then the rest of my money plan tends to be much easier to balance, so that I’m moving towards my goals and not teeter-tottering up and down.

If the Big 3 represents more than 55%, it may be a sign that I have too much house or too much auto, and it may take some major lifestyle decisions to adjust for a balanced budget. Where do you stand with your Big 3?

[Image by Ло on, licensed under Creative Commons]

One Response Post a comment
  1. April 20, 2013

    Really enjoyed reading through.

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