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70/20/10 Rule: Enjoy Life Now & Fund Your Future

Written By: Dan Pascone
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TL;DR Answer Box

You do not have to choose between joy now and freedom later. Use the 70/20/10 rule (70% living, 20% building, 10% giving or growth), automate the 20% first, spend intentionally on what fuels you, and set guardrails so splurges are planned, not guilty.

Last updated: September 30, 2025

Introduction

High earners often bounce between two extremes: splurge and feel guilty, or save hard and feel deprived. The antidote is not a stricter budget. It is a smarter system that aligns money with your values so you can enjoy today and build tomorrow.

Watch: Enjoy Life Now Without Screwing Over Your Future

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The 70/20/10 Rule

  • 70% for living: lifestyle, experiences, everyday needs.
  • 20% for building: savings, investing, and future wealth.
  • 10% for giving or growth: generosity, education, or passion projects.

This values-driven split keeps money serving your life, not the other way around.

Five Strategies to Live Well Now Without Sacrificing Tomorrow

1) Set a baseline

You cannot optimize what you do not track. Map income, expenses, and your current savings rate. Pick a framework you will actually use:

  • 50/30/20: simple, flexible guardrails.
  • Zero-based budgeting: every dollar has a job, maximum intentionality.

2) Automate your future first

Do not save what is left after spending. Spend what is left after saving. Auto-fund your 401(k), IRA/Roth, HSA, brokerage, and emergency fund on payday. Treat the 20% like a non-negotiable bill.

If you want a full system for this, start here: Mastering Cash Flow Management and Expense Planning.

3) Use value-based spending

Ask of each purchase: does this drain me or fuel me? Five takeout dinners from fatigue is low value. A weekend reset with your spouse after a brutal quarter can be high value. Spend extravagantly on what aligns with your values, cut ruthlessly on what does not.

4) Build guardrails, not restrictions

Freedom comes from structure. Pre-plan big experiences so you can say yes without guilt:

  • Create dedicated travel and hobby funds.
  • Set annual experience targets (not just stuff targets).
  • Use soft caps to prevent lifestyle creep.

5) Visualize your future self

Where do you live? What does your day look like? How flexible are you? Let that future version evaluate your current choices. When present actions serve future goals, money becomes a tool, not a source of stress.

Key Takeaways

  • Alignment beats extremes: the 70/20/10 rule balances joy now and security later.
  • Automate the 20% first: build wealth by default, not willpower.
  • Spend by values: say yes to what fuels you and cut the rest.
  • Use guardrails: plan splurges so they are guilt-free and sustainable.

FAQ

How do I adjust 70/20/10 if my income is lumpy (bonuses or RSUs)?

Automate the 20% from base pay, then route a fixed percentage of each bonus or equity event to building and pre-planned experiences. That keeps lifestyle steady while wealth compounds.

What goes in the 10% “giving or growth” bucket?

Generosity, education, and passion projects. Think courses, certifications, charitable giving, or funding a creative pursuit.

Is 70/20/10 right for every household?

It is a starting point. If you are catching up, consider 65/25/10 for a season. If you are ahead, 75/15/10 can work. The best framework is the one you can live with consistently.

How do I avoid lifestyle creep?

Pre-commit your raises: 50% to building, 50% to living. You will feel the upgrade and accelerate your future.

What if emergencies derail my plan?

Protect the 20% by keeping a funded emergency reserve. When shocks happen, you tap the reserve, not your investment plan.

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If you want joy now and freedom later, do not aim for perfection. Install a system: automate the 20%, define your values-based “yes” categories, and set guardrails that keep spending intentional.

If you want help turning this into a real household operating system (cash flow, automation, taxes, equity comp, and goals), that is what we do at Tailored Wealth.

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Disclaimer

The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. 

No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. All investments include a risk of loss that clients should be prepared to bear. The principal risks of Tailored Wealth’s strategies are disclosed in the publicly available Form ADV Part 2A.

The views expressed in this commentary are subject to change based on market and other conditions. These documents may contain certain statements that may be deemed forward looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability, or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

Tailored Wealth and its advisors do not provide legal, accounting, or tax advice. Consult your attorney or tax professional. 

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