Budgeting Formula
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Next, you'll setup your first formula for budgeting and managing your Earned Income. If you have debt, you'll include that as well in the settings.
Our default formula per TWF methodology is 70/10/10/10 but you can set it to whatever you want.
These settings will affect all ratios across the entire app. You can also change these settings at anytime later under Budgeting.
If you have questions just click the tool tips for more info on each setting.
Keep in mind all percentages must add up to 100% in order to save and proceed to the next screen.
TWF advocates living off of 70% of your earned income. This is the proven formula over time that creates wealth when applied consistently and using the full system.
Living Expenses tool tip: Housing / Food / Utilities / Transport / Other
This is known as your "Wealth Account" and is referred to in depth in True Wealth Formula training programs and it is THE critical component to converting earned income into unearned income and becoming financially independent.
TWF advocates a minimum of 10% towards Wealth Account (if debt exists) otherwise it should be 20% as this is the proven formula over time that creates wealth when applied consistently using the full system.
Wealth Building tool tip: Seed capital used to create your unearned income
TWF advocates being a giver and the default ratio is 10% but you are free to set it to whatever you want.
Charity or Giving tool tip: Amount set aside for charitable activities
Debt acceleration is built into the app and a key component of our algorythims to help you convert earned income into unearned income and generate compounding wealth (instead of paying compound interest).
Do you have Debt tool tip: Select yes if you have debts (liability accounts) you want to accelerate payoff for more free cash flow towards wealth building
If you've selected Yes above, you can enter a percentage for Debt Acceleration. The default ratio is 10% but you can change it to whatever you want.
Debt Accelerator tool tip: To be applied towards Debt Payoff
