Step-by-Step Guide to Creating Your Financial Plan
Learn how to set up a comprehensive financial plan in the Finance Planner app. Follow these steps to create your calculation, add persons, and plan your expenses, incomes, savings, and loans for a complete financial overview.
The first step in creating your financial plan is to set up a new calculation. This forms the foundation of your planning.
The Calculation dialog where you enter your planning name and starting balance
💡 Tip: The account balance represents the shared account of all participants in the planning—similar to a profit and loss account in a business, but for private use. It serves as the reserve from which expenses are paid when they cannot be covered by current incomes.
After creating your calculation, add the persons involved in your financial plan. This is typically yourself, your partner, or other household members.
The Person dialog where you enter name and date of birth, with retirement date slider visible
After adding persons, you can start planning different financial categories. The recommended order is:
Mortgages are a specific type of expense where the monthly payment is calculated based on the loan amount, interest rate, and repayment schedule. You can also model mortgage interest tax deductions. Here's how to configure a mortgage:
The Mortgage screen showing all configuration options with numbered annotations
Enter the total loan amount at the specified start date. For example, if you're taking out a mortgage of $300,000, enter this amount here. The app will calculate the monthly payments based on this amount, the interest rate, and the repayment scheme.
Set the annual mortgage interest rate as a percentage. This is the interest rate charged by your lender on the loan amount. For example, 3.76% annual interest.
Choose the repayment scheme for your mortgage. There are three options:
Configure the mortgage interest tax deduction (if applicable in your country). Enter the tax deduction rate as a percentage and specify the date until which this deduction is valid. This helps you model tax benefits like the Dutch "hypotheekrenteaftrek" or similar tax advantages in other countries.
💡 Note: Many countries offer tax deductions on mortgage interest to encourage homeownership. Check your local tax regulations to determine if you qualify and what percentage applies to you.
💡 Tip: Mortgage planning is essential for long-term financial planning, as it typically represents one of the largest expenses in a household budget. By modeling different scenarios, you can understand how your mortgage affects your ability to save and retire early.
Expenses are a crucial part of your financial plan. When you plan your expenses, you can see what you need to do to achieve your financial goals. Here's how to configure an expense:
The Expense screen showing all configuration options with numbered annotations
Enter the net expense amount. This option is used for expenses whether they occur regularly or happen just once—like monthly household costs, annual holiday spending, etc. Use the Loan option if you want to calculate costs for a loan like a mortgage, which can also calculate interest deductions (Dutch: hypotheekrenteaftrek).
Set how often the expense is paid. You can choose monthly, quarterly, or yearly expenses. You can also set the occurrence frequency—for example, every 1 or 2 months.
Define when this expense should happen. You can plan future expenses like college fees for your children, or recurring costs like house painting every 5 years. Some expenses will change after you reach your retirement age.
This feature helps you easily link dates to retirement. You can set the date to the fixed retirement date or to an adjustable retirement date using a slider when analyzing your calculation results—for example, to check when you can stop working given all the items you have entered.
Determine if the expense should be indexed for inflation. Most costs are indexed over time, so enable this for most cases. This is important when you want to analyze your calculation with the effect of inflation to get a realistic view of future costs.
After planning your expenses, set up your income sources. Income planning follows similar principles to expense planning:
First, we set up a job income of 3,000 per month. The income is inflation-adjusted and will stop at the early retirement date.
Setting up job income of 3,000 per month, stopping at early retirement
We also set up expenses of 2,000 per month. This gives us a monthly surplus of 1,000 that we can save.
Next, we add a pension of 1,000 per month. The pension starts at the fixed retirement age and is also inflation-adjusted.
Setting up pension income of 1,000 per month, starting at fixed retirement age
When we press Calculate, the first planning results appear. Here we've set the early retirement date to age 65 by clicking the FIRE button (1). If there are multiple persons in the planning, you can adjust their FIRE dates individually (2).
Calculation results with income, expense, and capital graphs
Looking at the wealth graph, we can see there's a shortage starting in 2049 at age 76. This means we need to plan our savings to cover this gap.
The wealth graph shows a shortage at age 76 in 2049
By clicking on the pink line in the income graph, we can see we have 1,000 to spend monthly until the early retirement date. Let's use this surplus to build savings!
Savings planning helps you understand if you can cover your costs and even retire early. Set up your savings strategy:
We add a savings account with a 6% annual interest rate. The deposits will stop at the early retirement date, and the savings account will end at the fixed retirement date—the remaining balance goes to the main account.
Savings plan with 1,000 monthly deposits at 6% interest
Note that we set both deposits and withdrawals to be inflation-adjusted. This ensures our savings strategy keeps pace with rising costs.
We set up a withdrawal of 2,000 per month during the period between early retirement and the fixed pension date. This covers the income gap when our job income stops but pension hasn't started yet. The interest continues to grow on the remaining balance during the withdrawal period.
Setting up 2,000 monthly withdrawal during early retirement period
After adding the savings plan, we recalculate. Now the wealth graph shows the shortage has moved from age 76 to age 85 (2058)—a significant improvement!
With savings, the shortage now occurs much later at age 85
Congratulations! You've created your first complete financial plan. From here, you can continue to refine your plan by adjusting savings rates, exploring different retirement ages, or adding additional income sources.
Once you've entered all your financial data, use the Calculate button to run your analysis:
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