There was a show on TV in which a lady was instructing the viewers on smart family mudgeting. She said that an avarage family spends way more than their actual income due to credit cards, cheques and loans they use. We over buy and waist in a carless manner.

There are different type of spenders, and there were plenty of examples to introduce these types on the show. I found the one I could relate myself, and some other types I could mark people I know. But who are we to decide who is right? Well, there is an actual plan, that should be a guiding line for all of us. It goes something like this:

No matter if you are single or representing a family of whatever number of members in it, the starting point is to take the total income you our your family, as a unit, can per month. That will be your 100%. The smart thing is never spend over that 100%, no matter if it is in credit cards, shopping or even emergency situations, like a sudden illness, or loss of job or your children's college. Of course, the ideal picture is to send your children to college and make sure you will be Ok after your retirement too - that is when savings should come in.

In her ideal plan this lady said that 70% of the income should be enough for your your monthly responsibilities, such as rent or mortgage payment, bills, gas, food, and basic clothing. She did not get down on how this 70% must be devided into these things, and I think it really depends on each family, and their situation. The point is, that if your income does not allow you to use only 70% for the monthly duties, than you should seriously start thinking about other ways to earn a better total income, or ways to cut back your monthly duties. The other 30% should be devided into two equal savings. One should be a general saving, that can be used for whatever you might need money for in any given emergency or family need. The other one should be a life saving for your retirenment.

If one can maintain such plan, than ther should be no worries for the future.

Of course, the more children you have, the less that 15% will be able to cover for family emergencies. So the smart palnner can raise and teach the children in the family to get summer jobs, or start earning their own income simply by saving up from their allowance, and holiday gifts. If a family income's 70% is taken off for shelter, food, clothing and living expences, than a child - teenager - can offer the very same 70% of his/her total income for savings. Here I am not talking about asking the child putting her share into the family savings, but start her own personal saving plan, which would take a bit off her parents' shoulder. She can still spend 30% of her income, and learn how to be smart and responsible with money. A good way to get our children ready for the real life, isn't it?

The question is, how realistic this plan is?

In Israel, the country I live in, for example, the numbers just don't seem to add up is such perfect percentage. I don't know how I am supposed to use only 70% of my income for my living expences, when the property value has raised into an unrealistic level, that for a price of a cute family home in let's say, Palm Coast, Florida one can only buy a tiny little apartment in an old and dirty building in a horrible area of any city that is NOT close to any major city. The closer you get to the main cities, like Tel Aviv, Haifa or Jerusalem, the higher and more outrageous are the propery values. I live in a city 30 minutes from Tel Aviv, in one of the worse neighborhoods of this city, filled with Ethiopians, Russians and some old timer retirees. The building I live in was probably one of the first buildings ever built in this neighborhood, and has no elevator or decent parking lots to it. The apartment is     43m(2) devided into two bedrooms, a living room, shower/toilette and a living room so tiny you can touch both walls when you stretch. Each room has only one power outlet, but if you try to use several electrical devices at once (washer, dryer, radiator and let's say a blow dryer) the power would cut off, because it's electric system is simply not enough for that much power usage. Now this apartment was on sale last year for $90000, but due to the huge decrease of the US Dollar, the property values jumped up, and this apartment is now worth $112 000 !!!!!! The apartment has no A/C or a decent kitchen installed and built in it. No walk in closet, no bath tub, not even a decent gate in the building entrance. Of course, my monthly duties are some what low due to the small living area, but during the heat of the summer, or the icey cold winter, the power bill basically triples itself. Rent is in this area only got up to anywhere between $700-$850 for a simiple apartment like mine.  If I break down the highest and lowest months into a monthly avarage, the bills come up to an avarage $650/ month not including cable, internet and all phones. Note that I did not even talk about food and clothing,yet  we have already reached a $1400 monthly pay run. Take it from me that for food and clothing a family of 3 will easily spend at least about $1000 a month. What about vactions, after school activities for the kids, God forbid gym or hair salon for the parents? How much should that take up in a month?

And what is the avarage pay in Israel? Well that is the good part - the avarage pay of a simple but hard working Israeli citizen is anywhere between $1200 to $1400 a month. In good cases an avarage male with phisical work can earn around the $1600 per month.

So how exactly am I supposed to live up to this ideal plan of life savings and smart spending plan?!

I mean, one day I would like to move up and out of this neighborhood, get a nice car, and maybe even go for a vacation here and there.  70/30 my a@*&*#@!