Learning to live by 10/10/80 rule

By RAY ADLER

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In previous columns we talked about goal planning, smarter goals, and life goals. Today we talk about an extremely important topic: money goals. When it came to money, my father, a hardworking teacher/farmer, had one simple rule. He called it 10/10/80. His theory under 10/10/80 was to give away 10 percent, save 10 percent, and live off 80 percent.

As a Christian, my father believed that we are made in God’s image and specifically designed to worship Him. As an act of worship to God and in recognition that all our blessings come from Him, we give 10 percent back to Him. Even if you do not believe in God, giving away 10 percent, be it a non-profit or other charity, has positive practical consequences. When we freely give, it prevents us from obsessing about money and becoming greedy. For money is not itself an end, but merely a means to an end. Moreover, giving spreads your influence. As we discussed in the column on LIFE Goals, giving enables us to build lasting connections and relationships, and may provide unforeseen opportunities and blessings.

It was my father’s goal to save enough money to cover his own expenses and to leave an inheritance for his children and grandchildren as his parents and grandparents had done for him. Thus, he was committed to saving 10 percent of his earning. At the dinner table one night, I asked when do you spend the 10 percent that is saved? He had an easy, five step response:

1. Do you want it? If not, don’t buy it.
2. If you want it, do you need it? If you don’t need it, don’t buy it.
3. If you want it and need it, do you have money in savings to purchase it? If you don’t have money in the saving account, don’t buy it.
4. If you want it, and you need it, and you have money set back to buy it, you ask could you really do without it?
5. If you want it, and you need it, and you have the money set back to buy it, and you can’t do without it, then go ahead and buy it. Otherwise keep the money in the bank!

My father’s theory on saving certainly takes discipline and self-control, yet, from my observation, served him well and enabled him to leave an inheritance for both me and my children.

Finally, are you willing to live off the 80 percent? In an age of credit cards, the internet, and Amazon Prime; where anything and everything you desire can be dropped on your doorstep within a matter of days, living within your means has become increasingly difficult. Our society values excess over temperance, extravagance over moderation. Living off the 80 percent requires discipline and perseverance. It requires budgeting. It requires saying “no” even when all the other neighbors say “yes.” Are you willing to try?

The beauty of 10/10/80 is it’s simplistic. It does not involve financial gurus, and there are no expensive classes to be taken. 10/10/80 can be understood by children and adults alike. I have strived to implement 10/10/80 in my life, and so far, it appears to have been a fruitful endeavor. To any person looking to conquer their finances, get out of debt, or even simply begin saving money, I would implore you to give 10/10/80 a try. You will certainly not become wealthy tomorrow but will be amazed at the financial transformation that occurs over time. 10/10/80 is about living proportionately, recognizing the Lord’s provision, and building a legacy day by day.

Educational material and not legal advice, written by the team at Adler attorneys. Email andrea@noblesvilleattorney.com with questions or comments.