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Make
goals concrete
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n |
What
and when?
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n |
House
down payment in 5 years
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How
much if undertaken today?
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$5,000
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Adjust
for inflation
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n |
3%
inflation rate so you need $5,796 (5000*(1+3%)5)
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Determine
an interest rate
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n |
6%
annual after tax
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Determine
a savings schedule using future value for an annuity table A.2
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n |
6%
for 5 years has a table entry of 5.6371 - meaning if you save $1 per year,
it will
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become
$5.64 (rounded in from $5.6371) in 5 years.
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To
get $5,796 in 5 years, you need $5,796/5.6371=$1,028
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You
need to save $1,028 per year, or roughly $86 per month.
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Monitoring
progress: Are you staying on the saving schedule?
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