Keep Your Finances In Check With The Rule Of 10

By on January 31, 2013

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Even though I’ve never thought of budgets as “sexy” per se, I do enjoy taking in the odd article from the blog Budgets Are Sexy. Today, I stumbled upon an interesting guest post by Matt Alden S. titled “The Mighty 10 Rule.” It’s an interesting (if not necessarily practical) way to look at your spending decisions while you’re trying to stick to a budget.

The math, which is based loosely on the opportunity cost of spending your money now vs. investing it at an assumed 6% rate of return per year over 40 years, is simple:

“Anything you buy today, your future self is paying 10x as much for. So add a zero onto the price tag, and ask yourself if it’s still worth it. If it is, buy it and enjoy it. If not, then forget it…”

Essentially, spending $100 today robs your 40 year old self of $1,000.

While the rule of 10 is an obvious stretch, the point isn’t to stop you from buying every single thing you want, but rather to get you thinking about the long term. Check out the full article below.

> The Mighty 10 Rule | Budgets Are Sexy
Photo Credit: Leo Reynolds

Russell Kith

About Russell Kith

Russell Kith grew up in small town Wisconsin, the youngest of 4 boys. Having devoted most of his adolescent years to troublemaking, he left home at 18 and roamed across the world taking a variety of jobs he declines to specify. These days, you can find him writing about personal finance on the web. You can follow Russell on Google+ or Twitter.

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