New Years Resolution: The 50/30/20 budget

I read an interesting article on MSN Money discussing "how much you should spend on..."

The writer discusses a very simple question I'm sure we all ask ourselves everyday: "How much should I be spending?"

She then suggests the 50/30/20 budget:

• 50% of your take home (after tax but before insurance and 401k deductions) should cover your "must have" expenses which include, rent, utilities, transportation, food, insurance, minimum loan payments, etc. Any purchase that can be delayed for a few months with no serious consequences is not a "must have" expense. Anything you're contractually required to pay is a "must have" expense.
• 30% of your take home pay goes towards your "wants." Vacays, clothes, eating out. The trick here is that some bills may overlap in the "must haves" and "wants" categories. Internet and television is technically a want but if you have a contractual obligation it would go into the "must have" category.
  
• 20% of your take home pay should go towards savings. Remember minimum loan payments go into the "must have" section but any payments you make on loans above the required payment would fit here. Additionally all retirement savings including 401k, IRA and stock investments are included here. Last but not least, your emergency savings fund fits here as well.
  

The writer adds that it takes time to get to these percentages. Starting out she was at about 60% for must haves. It took a year for her to get to 50/30/20.

I quickly computed my ratio as of now and came up with 60/20/20. I'm sure if I take a more in depth look those ratios would become a little less pretty.

Take a look at your ratio starting out 2011. Where can you shift things around? Are you spending more in places you should be spending less? What goals have you set for long term spending and saving? Challenge yourself to achieve a new ratio by 2012.