How I split my income to build wealth, reach my goals and stay ahead
Managing income is an art. For me, it’s not just about covering bills or saving a little—it’s about crafting a system that turns every pay check into a stepping stone toward long-term wealth.
Over time, I’ve experimented with different methods, my favourites have boiled down to two distinct approaches: one simple, one more detailed. Both have their merits, are suited for the different seasons of life and both are game-changers.
A simple system: 50-40-10
If you’re looking for something straightforward but effective, the 50-40-10 rule is a no-brainer.
- 50% investments
Half of my income goes directly into building wealth. Whether it’s stocks, index funds, forex or crypto (using platforms like Swyftx), this chunk is non-negotiable. The goal here is simple: let money grow while I focus on doing the work I love. - 40% needs
This covers rent, groceries, utilities, and all the essentials. I try to keep this lean—it’s a motivator to live intentionally and not inflate my lifestyle unnecessarily. - 10% wants
This is a guilt-free zone. Dinner at a new restaurant? Sure. A weekend getaway? Absolutely. New moisturiser or fitness class I want to true? Let’s do it. This category reminds me that building wealth doesn’t mean sacrificing joy.
What makes this system great is its simplicity. It’s easy to calculate, easy to stick to, and perfect for anyone starting their wealth-building journey.
The detailed system
For those who love a bit more structure (or have diverse goals), my complex approach adds nuance. Here’s how it breaks down:
- 10% everyday expenses
These are the small, recurring things—coffee runs, groceries, transport. Keeping it tight prevents waste. - 8% savings
This category is for medium-term goals, like a holiday fund, new shoes if a pair has finally kicked the bucket or a major purchase. - 10% investments
This is where the magic happens. Crypto, shares, ETFs—this slice is focused on long-term growth. - 5% emergency fund
Unexpected expenses happen, and this fund keeps me from dipping into investments when life throws a curveball. - 50% High-yield savings account (HYSA)
Think of this as a holding tank. It’s a safe spot for money I’ll need soon but with a bit of interest to sweeten the deal. This is usually split into a term deposit once the minimum amount is accrued so that is earns a higher interest rate than standard. - 5% Kiwisaver
For New Zealanders, this is a retirement safety net. If you’re elsewhere, swap it out for your local equivalent (eg 401K for US). - 12% student loan
Paying down debt isn’t glamorous but it’s satisfying. Whilst New Zealand student loans are at 0% interest, this stops and interest starts to accrue on the loan if you leave the country for an extended level of time. This is my only debt so it’s about reducing liabilities so future income feels freer.
This system manages all levels of life’s obligations, that my bills are paid and ensures investing and saving are both covered.
How I make it happen
Here’s the real secret: spreadsheets.
Every time I get paid—usually after my clients settle invoices on the 20th of the month — I plug my after-tax income into a spreadsheet. It calculates exactly how much goes into each category. From there, I transfer the money to its respective account, no fuss.
This process might sound rigid, but I think it feels liberating. Knowing that everything is accounted for and all of my goals are being attributed to at all times gives me peace of mind. Plus, automating these decisions means I spend less time worrying about money and more time focusing on what matters.
Adapting these systems to your life
Not everyone has the same priorities. Maybe you don’t have a student loan, or you’re in the U.S. and need to swap Kiwisaver for a 401k. The beauty of these frameworks is their flexibility. Tweak the percentages, adapt the categories and make it work for your goals.
I should probably include a disclaimer here encase anyone had any questions reading this:
- I don’t have an consumer debt to deal with – no credit card debt (I don’t have a credit card anyway), no buy-now-pay-later (like Afterpay) debt to pay
- I do not have any children so my priorities and also level of expenses may be very different to yours.
The bottom line is that splitting your income is more than just budgeting—it’s about giving every dollar a job and ensuring you are allocating money to work for you (prioritising investments).
Whether you prefer the simplicity of the 50-40-10 rule or the detail of a more complex breakdown, the key to any system is consistency. Start where you are and stay focused. Because at the end of the day, it’s not about how much you earn—it’s about how you use it.
