Slashdot | Switching to Contracting?: "1) First, take base pay (P), and multiply by 2/3rds.

2) Then, take out at least 10% for 'short term' savings (S) - in case you lose the job (something like a savings account would do.) If this acct ever gets over a couple thousand, move it to long-term savings.

3) Then, take out another 10-20% and set that side for retirement (R) in a long-term fund. I set it this high for several reasons: 1) you want to retire early, 2) inflation, 3) knowing the flukes of our economy and career choice, you'll likely need it sooner than later. This is also a practice of the Japanese culture (or was, 10 years ago), and it's been shown that the 'recommended' 10% that most Americans save has traditionally not been enough.

4) Now, figure what your annual health (etc.) costs (H) will be, and subtract it from what you have left.

5) This will leave you with the money you have for day to day annual living. Divide by 52 to figure out what your weekly available budget would be.

6) Figure out what you could get by on in order to pay rent/mortgage, food, utilities and a base level of entertainment (eating out, movies, video games) funds for the both of you. Subtract this living cost (L) from the total.

7) You should have at least 5% of your living costs left over at the end of the month.

So, in summary:

((2/3)P - SP - RP - H)/52 - L >= 0.05(L)"