Andrew Priestley is one of the guest speakers on my Women’s Leadership Success programme taking place on 4th March, 2013
Below he shares his thoughts on why we should all be living by the 70/20/10 rule
Most Brits spend 130% of their take-home weekly pay. This means that they are funding the additional 30% on credit cards, loans and store charge cards. This quickly becomes a long term cash-debt problem.
And sadly, it is self-inflicted.
There are several key reasons why debt occurs but the biggest causes are spending more than you earn i.e., living beyond your means; and spending more than you need to. The one that bugs me the most is buying stuff you don’t really need. For example, bright, shiny, new stuff.
I was recently in an electronics store and I overheard a young married couple arguing over whether or not to buy a gaming console and 3D TV. They were weighing up a 15 month non-payment loan.
But it can be really benign stuff. Recent food shopping research shows that people spend nearly 40% more than they need to at the weekly grocery shopping expedition … if they don’t use a shipping list.
Fortunately, debt is something that you can cycle out of. In my experience you can be well on the way to debt-free with 90 days but it takes commitment and energy.
The starting point is to learn to live on 70% of your take home pay. 10% you should save. And 20% you should use to reduce debts.
In addition, you can sell any stuff that you no longer need. A client recently sold over 100 pairs of shoes she doesn’t wear! She made £350 but that money was used to reduce her credit card bill. A musician sold some sound gear and musical instruments and a) banked £2300, b) paid off a loan and c) emptied his loft and garage.
Two university students followed the 70/20/10 rule for 3 months and booth have surplus cash for the first time ever!
One client reduced her debt and created a nice little nest egg of cash … and then ‘borrowed’ it to her brother who is still to repay her.
I am Jenny Garrett, Executive Coach, founder of Reflexion Associates, a leadership and coaching consultancy and author or Rocking Your Role – the how to guide to success for female breadwinners. Find out more about me, my programmes, speaking engagements and training at rockingyourrole.comand sign up for my newsletter