Ever since I started budgeting, I was continually trying to see where choices in our spending + saving would take us in the future.
This process required finding online calculators and creating advanced spreadsheets that would put together the numbers. Doing this worked okay, but it was time-consuming, and changes would require refactoring the calculations.
I started thinking about creating a tool that would make this easier to manage and update. This thought process is how Money Stir Tools was born.
I'm ecstatic to open up Money Stir Tools to the world and see how people use the system! Let's dive into what Money Stir Tools is and the problems it is aiming to solve.
What is Money Stir Tools
The primary purpose of Money Stir Tools is answering the following questions. All of these questions are based on your spending and saving amounts.
- How long will it take to pay off our credit cards and become credit card debt free?
- What is our current savings rate?
- After 1, 5, or 10 years, what is a rough estimate for the balances in our savings/investment accounts?
- How long will it take us to pay off our mortgage early with extra payments?
- What percentage of our take-home pay are we spending on groceries?
Note: Some of these graphs and calculations changed a little bit since I wrote this article. But the general info stayed the same.
It came down to the fact that most budgeting software/systems help you look at what is currently going on and what has happened in the past. But I'm not aware of any systems/tools that provide a way of taking a peek at the future, at least in looking at your budget as a whole. Personal Capital has some of these tools, especially with retirement planning. But even PC didn't do everything I wanted.
And that is what Money Stir Tools is about. Generally seeing where your overall savings + spending patterns will take you down the road.
For example, when we were paying off credit card balances, it would have been fantastic to see a report that gives us a rough estimate in about when we should have each credit card paid off, like this:
When we were paying off debt, I would create rough calculations to figure out when I thought we should be able to pay off each of our credit cards. It took a ton of time to update the numbers when our projections were different, or when our income changed for any reason.
I also wanted to see how much our 401k contributions and how our after-tax investment accounts would look after 5-10 years. All of this info is readily available in Money Stir Tools.
Money Stir Tools allows you to enter your budget, and quickly make changes to your income and your budget category amounts. All the reports will update immediately, and you can see an updated perspective of your future financial picture at any point.
Our Definition of a “Budget”
Even if you don't keep a detailed budget, that doesn't mean you can't find value in Money Stir Tools.
However you enter your budget, is totally up to you. As long as you have a rough idea on how much you save and spend on a general level, you can have as many or as few budget categories as you want.
The more granular you can get with the data you enter into the system, the more information it will provide. But there is no requirement in how you enter your budget.
To be clear, Money Stir Tools is not meant to help you track and maintain your budget.
It doesn't connect to any bank accounts or track your actual account balances. For example, you could enter your budget into the system differently than how your real budget is set up.
To simplify things, there are four top-level budget category types you can classify each category under:
- Spending: Groceries, mortgage payment, etc.
- Sinking: Saving for a new cart, bulk insurance payments, etc.
- Savings: Emergency fund, retirement savings, taxable investment accounts, other investment/savings accounts, etc.
- Debt: Credit cards, car loans, student loans, etc.
Which category types you classify each budget category determines which reports they show up in, and how those balances are handled.
I suggest entering your normal mortgage payment under the Spending category type, as the mortgage analyzer report provides a way in taking a close look at your mortgage debt.
Estimating Your Financial Future
With most debts, we can predict fairly accurately how long it will take to pay off those debts with a set payment and a set interest rate.
But with investments, it becomes trickier, because the market will fluctuate. One year your investments might go down, and another year you might see massive gains. That's why it might be best to estimate your average yearly interest rate at the low end. If you estimate on average you will make 12% per year from an investment account, you might be sad to realize that even over a long period of time, you are closer to an 8% annual gain.
The investment returns and account balances are estimates. We can't know with 100% certainty what is going to happen in the future. So your best bet is to use a more conservative number on the lower end, just to prepare yourself with what might happen. You have full control over setting your average annual return for all of your savings/investment budget categories.
It also might give you insight into diversifying your assets. This could be from investing in real estate to dumping money into your business. In either case, this financial insight is valuable in considering different options.
The Goal of Money Stir Tools
There a few parts to what I'm trying to do with this software:
- Give people future insights into their savings + spending
- Creating a system that we will use for helping us iron out and change our budget over time
- Creating a product that has the potential to help cover the growing costs of this website and provide an additional income stream
The more information we have in what is going on in our financial lives, the easier it becomes in making informed decisions.
This could mean cutting back in specific spending categories or spending more money on vacations. It also provides reports that I can show Andrea to see where we could be if we shoot for a spending + savings plan.
It's hard to explain what saving $500/mo in each of our Roth IRA accounts will do in 10-years. Showing a graph in how the numbers play out makes the data more clear and exciting.
Seeing how your money can grow over time once you start saving for your financial future could motivate you to increase your savings rate. Or you could see the effect of what bringing an extra $1,000/mo could do to your budget. In all cases, you equip yourself in making smarter financial decisions.
As people start using the system, I plan on implementing additional features and tools over time. I would love to hear your thoughts on how I can make this tool more useful.
Cost of Money Stir Tools
Money Stir Tools has two plans available:
Free Membership Plan
You can signup for a free account which allows you to do the following:
- Create and manage your budget
- View the budget report, which provides the following:
- Savings Rate
- Budget Category Breakdown
- Payments over time with your debt, sinking and saving budget categories
Ads are displayed on different pages with free membership, which helps cover the costs of running the website. But it costs $0 to create a free membership.
Premium Membership Plan
The premium membership has access to everything the free membership provides, but gives access to additional reports and functionality:
- Debt Report: See estimated dates on when you will have each debt paid off. Your estimated debt-free date is shown on this report.
- Savings Reports: Estimate your savings + investment account balances over time.
- Mortgage Analyzer: View estimated pay off dates and the amount of interest saved when trying to pay off your mortgage early.
- Unlimited Budgets: Which can be useful in seeing how tweaks to your spending + saving can change the numbers in the reports.
You can view the premium membership cost from the pricing page. At any point, you can upgrade your free membership to the premium plan.
Sign up for the Money Stir newsletter below to get a code for a free 10-day premium membership trial.
Why aren't all features free?
In a perfect world, I would be able to offer all of these features for free.
But the reality is, it took hundreds of hours to build and test Money Stir Tools. And I had to upgrade the website hosting to handle the additional load and processing required to generate these dynamic reports.
I wanted to create something useful but also didn't cost a lot of money for people to use. That is how I landed on the current pricing structure.
Is it true that you could come up with these calculations yourself? Yes. But having a system that automatically generates these reports and allows you to tweak the numbers easily is a huge timesaver. In our case, I would have been willing to pay for a tool that provided this detail in our budget, and I'm hoping other people find it useful.
Also, the pricing model offers an incentive in adding additional features over time.
If you have a system that gives you enough details to understand what financial path you are on, that's awesome! But if you feel a little lost in gathering these details, you might want to give Money Stir Tools a try.
Again, I'd love to hear what you think of the tool and the website, and ideas in how I can add additional value. Let me know what you think. 🙂