The Foundation Hour – The 10% Rule
Today on the podcast Business Life of Husband and Wife, we have added a fourth format to the show, The Foundation Hour, where Clint and Robyn discuss and elaborate on the rules they live by. This format is going to have eight episodes this year. They will take each of the rules they live by, grow their business, and break them down so we can all learn from them. Also, if you are watching on the YouTube channel, diagrams will pop up on the screen, and if you are not watching but listening, the diagrams will be on the value-added section of the website, where you can find lots of free information.
This is the first episode of the fourth format, where they discuss their favorite rule, The 10% Rule.
“What is the 10% money Rule? The 10% rule is different from an actual rule per se. It is an idea people leverage where you save 10% of everything you earn towards your different financial goals. For instance, your emergency fund, saving for retirement, or investing. This is a common rule of thumb when it comes to savings.”
“The 10% rule of saving money is that you should save 10% of every dollar you make. Then, the money should be set aside in an “oops fund,” a savings account or emergency fund that can be useful in times of financial hardship or unexpected expenses.”
“One of the key benefits of having an oops fund available in business is that it helps to ensure financial stability and security. In the event of a financial crisis or unexpected expenses, having a reserve of money available can help to mitigate the impact and keep the business afloat. This can be especially important for small businesses, which may not have the same financial cushioning as larger enterprises.”
Projections and budgeting are based solely on 90% of your income, so 90% is for budgeting and paying rent or building loans. Clint and Robyn have been doing this for five years now.
Clint and Robyn recommend following these three simple steps to implement The 10% Rule into your business or life.
- They recommend opening a separate bank account from your checking or standard operating account.
- Set up a reminder to transfer all your daily streams and reconciliations down to every penny from the operation accounts to another particular account, like the oops account.
- 90% of your income now becomes 100% budgeted for the month quarter of the year all of your cash flow planning
The rule is simple, but the execution is where things get complicated. Saving 10% of your income can be challenging. It requires discipline and a willingness to make sacrifices. According to financial expert Dave Ramsey, “Financial peace isn’t the acquisition of stuff. It’s learning to live on less than you make, so you can give money back and have money to invest. You can’t win until you do this.”
By implementing the 10% rule, a business can foster a culture of experimentation and innovation, leading to new products, improved processes, and increased efficiency.
The bottom line is that no matter what is going on in your life or business, there is always uncertainty, and you need to be prepared for anything life throws at you. So The 10% Rule is an excellent way to prepare for the unexpected.
What do you think? Is this rule something many of you will try in your personal life and business? We would love to hear from you.
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