The 60% Solution: A Simpler Way to Think About Budgeting
We have never walked into a client meeting and told someone they need to “start budgeting.”
Why?
Because for many people, budgeting feels restrictive.
Most people do not want to:
track every grocery purchase
categorize every Starbucks run
manually monitor every dollar spent
That level of detail is difficult to sustain long term.
Instead, we often focus on something simpler:
structure
percentages
systems
This is what we call the 60% Solution.
What Is The 60% Solution?
The idea is straightforward:
Your committed monthly expenses should generally stay below 60% of your gross income.
Committed expenses may include:
Housing
Taxes
Car payments
Insurance
Utilities
Internet
Debt payments
Basic recurring bills
Example:
Household income: $250,000/year
Monthly gross income: ~$20,800
Target committed expenses: ~$12,500/month or less
The goal is creating enough room in your financial life to:
save consistently
absorb unexpected expenses
avoid financial stress
maintain flexibility as life changes
Why This Framework Works
Many long-term financial challenges are driven more by large recurring expenses than occasional small purchases.
Examples may include:
oversized housing costs
too much debt
lack of flexibility
lifestyle inflation
When committed expenses become too large, it becomes harder to:
save for retirement
build an emergency fund
buy a home
travel
invest consistently
handle unexpected costs
The 60% Solution creates a framework that allows the rest of the financial plan to function more smoothly.
The Other 40%
Once committed expenses are controlled, the remaining income can be directed more intentionally.
A common framework may look something like:
10% toward long-term goals
10% toward mid-term goals
10% toward lifestyle and enjoyment
10% toward variable expenses
The exact percentages matter less than creating a structure that balances saving, flexibility, and lifestyle spending intentionally.
The goal is balance.
How This Helps With Big Purchases
One of the most practical uses of this framework is evaluating large financial decisions.
For example:
Can I afford this house?
Should I buy this car?
Can we comfortably upgrade our lifestyle?
Instead of asking:
“Can I technically make the payment?”
A better question may be:
“Does this keep my committed expenses below roughly 60% while still allowing me to save toward future goals?”
That shift can help create more long-term flexibility and reduce financial pressure over time.
Simplicity Creates Consistency
The best financial systems are often not the most complicated.
They are the systems people can actually maintain.
The 60% Solution is designed to create:
structure without micromanagement
intentional spending without restriction
flexibility without constant tracking
For many households, that creates a more sustainable approach to managing money long term.
Final Thought
Financial planning does not always require tracking every dollar perfectly.
Often, the biggest improvements come from managing the largest parts of the financial picture:
housing
debt
savings
lifestyle expectations
When those areas stay aligned, everything else tends to become easier to manage.
If you enjoyed this article, you may also like:
“How Much House Can You Afford?”
“Why High Earners Need a Brokerage Account Beyond Their 401(k)”