What's YOUR Make or Break Number?

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    What’s YOUR Make or Break Budget Number?

    1. Good point about including a buffer. It seems no matter what you do with budgeting, the most diligent of plans go awry and you need a bit of wiggle room. After experiencing a bit of lifestyle inflation, I plan to use September to reset my “make-or-break number”!

    2. Great post. The problem I see with a lot of people is that they have the incorrect definition of “essential” expenses. Honestly, only food, shelter, a few other things like (internet/cellphone if required for you to earn money) is truly essential…Another thing is credit is easily available and people feel that it’s the norm to just spend money they aren’t committed to making.

    3. Great post, Stefanie. I wrote a similar post to this quite some time ago, and it is SO important to know that make or break number. If you’ve got it done pat on paper, it’s a quick and easy reference if income ever falls short.

    4. Kim says:

      Unfortunately or fortunately, our make or break number is pretty high due to our two rental properties. Yes, they are covered by the rents, but it does make me a little nervous knowing we’d be in a jam if both became vacant at the same time and we lost jobs as well. It’s not likely, but could happen. I think the worst thing people do when they get in a really bad situation is continue living the same way as they have grown accustomed to. If we lost both tenants and a job, it would be survival mode and maybe even listing one property for sale quickly, not after we burn through all of our savings and retirement accounts.

    5. Great post, Stefanie. I don’t think I’ve ever sat down and thought about my “make or break” number, but I do know that I have done everything I can to increase my income the past two years (and continue to try to increase it!). Increasing income, and then funneling that additional income into savings and investments, is the best way to make sure you will have finances if you hit a rough patch.

    6. Tre says:

      I do know that number! It’s the minimum salary I will consider. Anything over that and I can weigh the money vs commute, hours, etc.

    7. Great post! I’ve never really had a chance to really think about it because it seems like there’s some random thing that comes flying out of nowhere every single month. Would be interesting to sit down and take a look at it though.

      • Stefanie says:

        For people who are really on the brink, I think it’s essential. Having a specific number as a target ensures clarifies the goal and makes it more tangible.

    8. When we moved, I made a bare-bones budget for myself and figured out what I needed to make in order to cover everything (and then some). Thankfully I had already been focusing on cutting my expenses, so rent was a big factor, but we had already figured out how much we were willing to pay for an apartment. It really is an important number to know!

    9. Hi Stefanie!
      I have a similar (or exactly the same) concept that I write about but I call it one’s primary wealth number. It’s a great number to know for sure. Mine is $3333. It’s good to know that in the event that Iose my job, I’d only need this amount monthly to keep living at my same level of comfort.

      • Stefanie says:

        What a great number, all 3’s! And yes, so important to know. I write a lot about the pursuit of a dreams and passion. For those who want to follow that route, knowing the make or break number is a must!

    10. Before we cut back on our spending, this number was significantly higher for us! One of the great things about getting spending and wants under control is that your make or break number lowers dramatically and anything that you earn above it goes straight to savings and growing your wealth so you can achieve financial freedom even faster. (At least this is our plan).

    11. I think it’s really important to know your make or break number. With no debt, high income and minimum mandatory expenses, we have a pretty low break number. However, since we’re DINKs, we tend to spend a lot more on spoiling ourselves. We’re always trying to find a balance and cut back our spending so we can save faster for a house.

    12. It’s so important to know this number! I have it firmly in sight at all times and it motivates me to hustle. But I am inspired to do even more, so I keep on hustling. I think this is why people stay in the paycheck-to-paycheck cycle, because they aren’t willing to look at the make or break number, and see where they can cut back and earn more.

    13. Love the buffer and the retirement being included in the costs. So essential to the budget. They should never be cut unless in extreme emergency. Need to find a way to pay yourself even in the tight times. Easier to know what to work on when you know the real numbers of your finances. Nice job!

    14. We have our number from tracking both our monthly budget and overall net worth. I like the wiggle room idea, things pop up that are not true emergencies and need to be accounted for.

    15. Our “make or break” number is very close to my husband’s take-home income alone – maybe a little higher. Believe me, I’ve been playing with the numbers quite a bit! I’m no longer receiving a steady paycheck after this month (and I’m not yet looking for a FT job), so I’ll either be earning some side hustle income or we’ll be dipping into savings! But that’s what it’s there for.

    16. May says:

      Good points. I don’t think a lot of people really know what their number is or underestimate it and find themselves in trouble. Mine is higher than I would like but it is a work in progress.

    17. Paula Kiger says:

      Stopping by from SITS — will come back when I can visit a little longer!

    18. Good post Stefanie. Makes sense to set specific target goals for the various accounts. Clarity helps the saver measure their progress. It also makes sense to make the number a little higher to allow for surprises and increases on the cost of necessities. Thanks for sharing.

      • Stefanie says:

        I’ve found that when it comes to finances, it’s always better to plan on a higher number and have an excess, rather than underestimating and having too little.

    19. This is a great thought concept… going to now calculate. 🙂 Thanks for sharing!

    20. Jean says:

      Great article. It’s important to know your bread-even budget, definitely.

      We’ve lived on a monthly written budget for over a decade. Intentional (as opposed to in-the-moment) spending is what got us out of debt, filled our emergency fund, and allows us to save heavily for retirement. Until we started planning the money just slipped through our fingers without supporting our goals.

    21. […] from the Broke and the Beautiful Life asks if you know your Make or Break Number. Now that I’m running my own business and have moved in with my boyfriend, I soooo need to go […]

    22. SarahN says:

      Thanks for this – I just ran the numbers (been meaning to for a while), and did ‘what ifs’ on the chance I might need a bare bones budget (in which case I’d sell the property I don’t live in, I rent). I kept the costs of my train to my currently well renumerated job, but one could assume I would need some transport costs! The salary I’d need, is more than half of what I earn, so that’s reassuring, and should mean I’ve saving a bucket load. For the record, it includes a ~9% contribution pre tax to my retirement.

    23. I love your add-ons. The fact that you still need to save for retirement is so true, but I really enjoyed noting the 10% buffer. No matter how you slice it, even if you cut out any sort of savings (bad idea), live still throws you curves and stuff gets forgotten. Great advice!

    24. bericm says:

      What a great post; there is NO plan without your “number”. Going into retirement I knew it well (hence retirement). Having been forced out of retirement I’m struggling to understand my revised number and it’s driving me crazy. I need another month of driving blind before I can take the wheel again. Fingers crossed.

    25. I like this method — I think it really helps if you write your expenses down so you know which ones you can cut so you know the least amount of money you need to earn to get by. Especially important if you’re moving somewhere else and trying to figure out your budget.

    26. We have this, but we don’t include retirement and emergency savings in our make or break number – if we have to be operating on a bare bones budget, then we assume that’s an emergency so generally we wouldn’t contribute to it until we were back on our feet.

      • Stefanie says:

        The make or break number I consider slightly different from an emergency budget. It’s a number to have as a reference point for the bare minimum you can afford to make every day, not necessarily in case of emergency. And in terms of every day, I consider emergency and retirement mandatory.

    27. This is a great way for people to attempt to live below means. People will be surprised how low the make or break number will be if they track only necessary expenses. I believe anyone can live below their means, with a bit of additional will power injected in their budget.

    28. jefferson says:

      i am pretty entrenched in the suburban life, with a nice house and lots of kids.

      as such, my “make or break” number is pretty high.

    29. Syed says:

      This is a great way to prioritize your finances. It’s also the only way to avoid living paycheck to paycheck. Very nice post.

    30. […] -What’s Your Make or Break Number by The Broke and Beautiful Life:  Great way to focus on what’s most important in your financial plan:  debt repayment, investing and cost cutting. […]

    31. […] -What’s Your Make or Break Number by The Broke and Beautiful Life:  Great way to focus on what’s most important in your financial plan:  debt repayment, investing and cost cutting. […]

    32. […] think you should follow your passion while staying realistically grounded in your money.  That was a lesson I came to learn after the safety net of the college years was gone.  The only […]

    33. […] of passion is getting grounded in financial reality; staying well above what I like to call “the make or break number”- the absolute minimum level of income needed to cover your most basic life expenses while […]

    34. […] of passion is getting grounded in financial reality; staying well above what I like to call “the make or break number”- the absolute minimum level of income needed to cover your most basic life expenses while […]

    35. […] and utility consumption, among other things.  If you’re having a rough month, you can adopt a “make or break” budget where you reduce discretionary spending and savings contributions.  There are all kinds of ways to […]

    36. […] the make or break number is the only way to start making progress. If you haven’t read the make or break number post, please do that first – that is step one. This post is about what you do in step two – […]

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