Can Your Clients Benefit From the 50/50 Rule?

Part of working with clients to help them understand and improve their daily and short-term (less than 18 months) spending is educating them on a number of Savvy Habits we have found and developed over the years.

One of our favorite Habits is The 50/50 Rule. The 50/50 Rule states that any time a client gets a windfall, from a bonus, gift, tax return, 50% of that is immediately given to their financial advisor to increase their long-term savings portfolio.

The other 50% can be used however the client wants, with one hard rule: It cannot result in an increase in debt or obligation. So if they have enough money, they can buy a motorcycle or take a European vacation; but they cannot use it for a down payment on the motorcycle or put part of that vacation on a credit card with plans to carry the balance.

We love this rule because it embodies so many things about The Savvy Life's philosophy. The client is identifying what is important to them. They are taking care of their future selves while also enjoying the present. They get to "splurge," but in a responsible manner.

If you'd like to learn more about our Savvy Habits and how they can help your clients understand and control their daily spending, we'd be happy to schedule a meeting at your convenience. Please send an email to [email protected] letting us know a time that would be convenient for you.