Budgeting tool

Find out what your current finance situation is
1
Income
2
Expenditure
3
Assets
4
Liabilities
5
Results

Monthly Income

$

$

$

$

$

$

$

$

$

Total Income$0

Monthly Expenditure

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

Total Expenditure$0

Assets

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

Total Assets$0

Liabilities

$

$

$

$

$

$

$

$

$

Total Liabilities$0

Your Monthly Budget

Results based on data entered

Income
$0
Expenditure
$0
Assets
$0
Liabilities
$0
0%
Saving Ratio
The saving ratio is the percentage of your monthly income that you save rather than spend on consumption. The ideal saving ratio is 15% or more, which means you are saving at least 15% of your income.
0%
Liquidity Ratio
The liquidity ratio measures the amount of time your savings can last if your income stops. The ideal liquidity ratio is 6 or more, which means your savings could last at least 6 months if your income stops.
0%
Debt to Income Ratio
The debt to income ratio measures your mortgage payments and all other debts as a percentage of your net income. Below 35% is acceptable for a conventional mortgage in the US. Above 45% is significantly problematic in most cases.
0%
Life Insurance Coverage Ratio
The Life insurance Coverage Ratio is a measure of what multiple of your income will be paid on your death. The ideal ratio is 10 or more, which means your life insurance pays at least 10x multiple on your current yearly income.
0%
Home Loan to Value
The mortgage loan to Property Value Ratio (LTV) is the percentage of your mortgage loan of the appraised value of your home. The ideal LTV is less than 80%, which means your mortgage loan is 80% of the appraised value of your home.
0%
Financial Leverage Ratio
The financial leverage ratio is the total value of all your assets divided by your net worth. The ideal value is 1.1 or less.

How to Use the Budgeting Tool?

The budgeting tool takes you through four steps where you will write down your income, expenses, assets, and liabilities. The tool will then calculate your budget and the key metrics about your current situation.

We recommend spending 10-20 minutes when creating your first budget.

Your answers are saved in the tool. You can always come back and edit your budget!

Step 1

Preparation

Creating your first budget takes 10-20 minutes, but you might need more time if you are not very familiar with your numbers.

Before you start, remove distractions and allow proper time to focus on creating your budget.

It will also help if you get all your papers nearby before you start.

Step 2

Enter Your Income

The first part of creating your budget is entering all your income into the budgeting tool.

Note that you should estimate your monthly income. If you have some yearly bonuses or other sources of income that are not paid out monthly, make sure to estimate how much those income sources are per month.

Step 3

Write Down Your Expenses

The expenditure tab has a lot of different fields for different types of expenses.

Fill in the ones that are relevant to you and leave everything else as $0!

Step 4

Enter Your Assets

In the assets tab of the tool, you are asked to enter all your assets, such as investments, home equity, and cash.

The total value of your assets might change a bit from day to day, but try to give an accurate estimate of your current assets.

Step 5

Write Down Your Liabilities

On the liabilities tab, enter information about your liabilities, such as loans, credit card debt, and child support, and alimony.

Some values, such as outstanding mortgage and credit card debt should be the total amount, but fields such as child support and alimony should be how much you pay per month.

Step 6

See the Results

On the results page, you will see a snapshot of your current budget and some key metrics about your financial situation.

Your answers are saved in the budgeting tool, so you can always come back and edit your answers!

Conclusion

Understanding the Key Metrics in the Budgeting Tool Results

When you go through the steps and enter your info into the budgeting tool, you will see some key metrics about your financial situation on the results page.

These metrics have been explained in detail in our course The Financial Freedom Blueprint. Check out the course if you are not a member yet!

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