Capital Investment Advisors

If Budgets are Depressing – TSL is the Cure

TSL = Taxes, Savings, and Life – the cornerstones of everyone’s financial life. For some, personal budgeting comes naturally. Maybe you grew up with parents who were meticulous budgeters and you inherited the gene; or maybe it’s the exact opposite – you’re a great budgeter because you’ve seen the pitfalls of bad budgeting first hand. For some, however, even the thought of budgeting can give you that “get back in bed” feeling… especially if you’re having to talk about budgeting with a spouse or loved one. So fear not – the TSL Lifestyle is here to save your financial life from ruin and it takes less than five minutes. Taxes have to be paid or you go to jail. Savings must be accounted for or you’ll end up broke. And Life is the fun stuff: rent/mortgage, car, vacation, eating out, climbing Everest, etc. The numbers and percentages vary based on your income and marital status… but take a look at the grids below and see where you fit in. This TSL approach is not a perfect science, but it will get you more than halfway home to understanding your budget. At the very least, it gives you an idea of where you stand.

Quick tip: A really handy way to visualize your monthly spending after taxes and savings is to divide your Life number by 12. So if you’re married and have a household income of $50,000 per year, divide $37,000/12 = $3,083. That’s how much you have left to pay for living and fun every month!

TSL Grid

Please note: This article is for informational purposes only and should not be taken as tax or investment advice. A 6% state income tax has been assumed for the tax portion of this example.

If your personal income is somewhere between the amounts illustrated, your TSL percentages will be somewhere in the middle, as well. The great thing about budgeting this way (aside from how easy it is) is that you have already taken care of the Taxes and Savings components of your financial life. Those numbers are NON-NEGOTIABLE for everyone. And for those married couples out there, this means you don’t have to fight about a huge part of your budget… now you can focus all your energy arguing over how exactly you spend that Life number!

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