Balance and Freedom in numbers
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Prefilled amounts are a hypothetical book example, not your personal data. All monetary amounts are in the selected currency. Replace them with your own values; zero means you have none of that amount.
Two sides of the scales
On one side is what we pay with throughout life. On the other is what we live for. There are two paths to finding balance.
Left side
Work · Time · Fatigue · Obligations · Uncertainty
Right side
Home · Family · Health · Travel · Reserve · Freedom to choose
Advantages
The ceiling for growth is higher than for saving; it gives you more room to manage your finances.
Limitations
It takes work, time and learning. Higher income is neither guaranteed nor effortless.
We do not balance our dreams by making them smaller.
Two paths to a financial goal
Saving means managing what I have. Earning more gives me more to manage. Change the values and see how the time to your goal changes.
What you actually receive each month after taxes and contributions. Add up net income, such as salary and business earnings.
Your total monthly spending: housing, food, transport, loan repayments and other regular payments.
The total amount you want for a specific goal, such as a home. This is not a monthly payment.
Money already set aside specifically for this goal. Leave 0 if you have none yet. Do not count the same money again as your reserve.
The lowest monthly expenses that still allow an acceptable life for you. The simulator will not reduce expenses below this limit.
How much less you could spend each month. The reduction is limited by your minimum acceptable expenses.
How much your monthly net income might increase above today's amount. This is an assumption, not guaranteed earnings.
Each row compares the same goal. Surplus is money left each month after expenses; remaining is the goal minus money already saved.
Surplus $5,000 · remaining $1,700,000
Surplus $10,000 · remaining $1,700,000 · 170 mo. earlier than the starting point
Surplus $20,000 · remaining $1,700,000 · 255 mo. earlier than the starting point
Surplus $25,000 · remaining $1,700,000 · 272 mo. earlier than the starting point
Longer bar = more time. The calculation excludes interest, inflation, price changes and the cost of creating new income.
How many months of freedom do you have?
Your financial reserve shows how long you could live without income from work. Independent income is a separate indicator and is not included in months of reserves.
Monthly living costs
$67,400
Current financial reserve
$472,000
Months without income from work
7.0
What you need each month to live, including housing, food and repayments. This determines how long your reserve lasts.
Money available for unexpected expenses and periods without work. Exclude hard-to-sell assets and money already set aside for your financial goal.
How many months without income from work you want your savings to cover.
The extra percentage added to the reserve for unexpected price rises and expenses. For example, 15% adds 15 currency units for every 100 units of the base reserve.
Monthly net income without your daily work, such as rental income. Leave 0 if you have none. Reserve months are calculated separately.
Monthly living costs multiplied by the desired number of months.
The extra amount calculated from the chosen percentage of the base reserve.
Base reserve plus the safety cushion.
Available money entered as your current financial reserve.
Target reserve minus current reserve; displays 0 if you already have enough.
25% of the reserve target reached
Current reserve as a share of the target reserve, displayed up to 100%.
Independent income covers 0 % of living costs.
Five levels of financial freedom
1. Survival
0–1 month
Independent income from $0
2. Stability
1–6 months
Independent income from $0
3. Security
6–12 months
Independent income from $0
On the way to comfort
12–27.6 months (transition)
Independent income from $28,067
4. Comfort
27.6 months of reserves
Independent income from $50,299
5. Freedom
independent income covers costs
Independent income from $67,400
Amounts under the levels show the independent net monthly income needed to reach each level with your costs and current reserve. The reserve then only covers the remaining gap.
Seven financial indicators
Seven financial indicators
The first three values and independent income come from your inputs. Enter debts and net worth below. Retirement provision is not calculated here; missing values are not zero.
1
Living costs
How much you actually need each month to live.
$67,400
2
Financial reserve
Available money for unexpected events and periods without income.
$472,000
3
Monthly cash flow
The difference between monthly income and expenses.
$5,000
4
Debts
All obligations you need to repay.
not entered
5
Net worth
Assets minus liabilities.
not entered
6
Retirement provision
What will provide you with income when you stop working.
not entered
7
Independent income
Income that does not require your daily work.
not entered
Estimated current value of everything you own: money, investments and property. Optional; a blank means not entered, not zero.
Your total outstanding debt, such as the remaining mortgage and loans. Enter the full debt, not the monthly repayment. Optional; enter 0 if debt-free.
From calculation to decision
Numbers matter only when they lead to a decision. Four steps take you from calculation to action.
- 1
Find out where I am.
- 2
Define my goal.
- 3
Choose a path.
- 4
Check my progress.
What remains each month after expenses with the selected savings and additional income.
Remaining goal amount divided by monthly surplus. Whole months round up; years show the exact ratio.
Current reserve divided by monthly living costs, excluding independent income.
The number of months you selected for your desired reserve.
Target reserve minus current reserve; displays 0 if you already have enough.
Based on your selected savings and additional income. If both exceed zero, the overview combines them.
This interactive learning programme is based on Your Vision Your Life – Balance and Freedom. The calculations are hypothetical scenarios, not investment advice or individual financial advice. Actual income and expenses may develop differently.