Peace, Love & Spreadsheets

Sum Calculator This calculator will help you answer the simple question of how much you need to save to reach a certain amount of money in so many years. It's pure math - doesn't take into account variations, inflation, changing expenses, extra social security or other factors. It's not advice and nobody can predict the future. But numbers can be very helpful. I used popular example interest rates, 4% withdrawl, 5% investment gains, but you can certainly change them. How much will you spend per year?   example: 75000 Rate of return from your investments?       example: 5 How many years until you retire?   example: 20 How much do you have now?   example: 100000 % you want to withdraw each year?   example: 4   Calculate What you need to retire: What you need save up every month to get there:     ...

 I see a lot of questions along the lines of "I'm BRAND new to financial planning, I have no idea what to do first, I have no idea what to save for retirement, or how much to save, or how to save, ahhhhh" and they're very stressed. Sometimes these people have NO savings and that's when the Dave Ramsey "save up $1000" baby step is a nice idea. I'll say a lot of other negative things about Dave Ramsey but he's good on that one. With a $1000 emergency fund, you've proven that you can save money. If you need a car repair, vet bill, emergency family visit, you have that cushion. But that's the "right now" first step. What about the retirement first step? I recommend calculating your annual spending.  This isn't "make a budget" - you can do that later. In fact you should definitely do that LATER, how do you get where you're going if you don't know where you're at? This means sitting down and downloading all y...

What's a good savings rate? Traditional 401k matching structures say 10%. The FIRE movement says 30% or more. Many of us are just saving what we can and we're lucky if we can save anything at all. But here's the math to figure out if your savings rate meets your goals.  One great lesson I learned from the FIRE movement is how to throw out income all together when doing finance math, and focus on spending. Everybody needs a certain amount to live, and the more you can lower that, the faster you can retire. I am not a full-on FIRE advocate because I like my job and I really don't WANT to retire all that early, but I like their math. I'm an engineer, I love spreadsheets. Excel has some great financial formulas. The idea behind FIRE is that if you can save up 25x your annual spending needs, you can stop working. If you have 10,000 saved up and invested in a nice reliable index fund, they predict that you can draw 4% a year off the top and it'll grow back every year....

Last year I was introduced to a trendy new idea in the banking world: High Yield Savings Accounts (HYSAs).   Every finance community I read had people saying oh you've GOT to get a HYSA! Why wouldn't you have an HYSA? Here's a website with the best interest rates! Here's a new weird online startup bank ith HYSAs! Move thousands of dollars into some weird website you've never heard of! The "high yield" everyone was so excited about? 1.5% annual interest rate. Maybe 2%. That's a high yield? They're telling me that if I have $1000 to save I can research, chase rates, obey weird new banking rules about direct deposit and minimum debit transactions, and if I pick the best website I can earn $20 a year? This is silly. It's now 2023. Rates are higher - upwards of 5%, which is nicer. So now I'll get $50 a year per $1000. But that rate isn't really difficult to get either. I've also found similar rates at... My local "brick and mortar...

My favorite beginner budget is the 50/30/20. I first read about it in the 2006 book All Your Worth by Elizabeth Warren (yes, THAT Elizabeth Warren!) and found it so simple and reasonable it became my go to for years. How much should I be paying down towards debt? What car payment can I afford? Is it okay to buy myself a new dress for this wedding coming up? The idea is that you break your budget into three categories: 50% for needs "Needs" are anything you must pay every month to sustain your life and meet your legal obligations. Rent, car payments, minimum credit card payments, minimum food. For the food budget, Americans can look up the USDA recommended food budgets. The government monitors food prices and allocates funds for employees. For example, in July 2023 a family of 4 should budget $965 for a "thrifty" food budget, $1500 for "liberal". My family uses the $1200 "moderate" budget. Anything past that, you're into the "wants"...