Welcome to the Future Fund Forecast (F³)
This simple tool helps you understand how redirecting small, regular, non-essential expenses into savings can grow over time, providing greater financial flexibility and a more secure retirement.
How to Use the Calculator:
Identify a Non-Essential Expense: Consider a regular expense that may not be necessary (in your opinion)—like daily coffee purchases or frequent dining out.
Enter the Expense Amount: Input the dollar amount of this expense.
Specify the Frequency: Indicate how many times per year you spend this amount (e.g., daily is 365, monthly is 12, etc.).
Annual Investment Return: Enter the percentage you expect to earn annually if this money were invested instead.
Growth Period: Decide over how many years you want to project the growth of these diverted funds.
What the Calculator Does:
By inputting the above information, the calculator estimates how much your savings could grow if you consistently invest the money instead of spending it on non-essential items. This shows how small, regular contributions can accumulate significantly over time.
Why Consider Redirecting Expenses to Savings?
Small, consistent savings can significantly impact your financial well-being over time. Starting early means time is on your side, and waiting to invest could cost you money. By making thoughtful choices about spending and saving, you can enjoy the present while securing a more flexible and secure financial future. Start exploring how your everyday spending choices can shape your financial future today!
Summary of User Inputs:
Identified Non-Essential Expense: e.g., $5.00
Frequency of Expense: e.g., Daily
Annual Investment Return: e.g., 6%
Projection Period: e.g., 20 years
Results:
Total Amount Contributed: This represents the cumulative amount redirected from spending to savings over the specified period, without interest.
Total Interest Earned: The growth achieved through investment.
Estimated Future Value: The projected value of the invested savings at the end of the projection period, considering the specified annual return.
Keep in Mind:
This basic model doesn’t account for factors like inflation or potential changes in investment returns. However, it provides a general idea of consistent saving and investing benefits. It projects interest by compounding it annually. With annual compounding, interest is calculated and added to your investment once per year. This method is commonly used in many investment accounts and provides a straightforward way to project growth. The calculator also assumes that payments are made at the end of each year, so even if you’re spending $10 per month, the model treats it as a single $120 deposit made at year-end.