You can build a long range financial plan with FarPlanner, including adding your current and planned homes, cars and kids. FarPlanner then forecasts your account balances and net worth for decades into the future. In seconds. It does this by mimicking your plan’s expense and income money transfers into the future.
FarPlanner Mimics Future Account Transfers Like You Might
For example, FarPlanner can mimic transferring a monthly mortgage payment from your checking account into a household expense category. Or mimicking your bi-monthly income from a salary income category into your checking account. FarPlanner forecasts your accounts’ balances by tracking all these inflows and outflows over time.
As FarPlanner mimics your plan’s account inflows and outflows, it also decides how to shift money between your accounts. FarPlanner does this at many points in your plan’s forecast. For example, suppose you plan a home purchase in 2 years with a $25,000 down payment. Starting tomorrow, FarPlanner would recommend putting money into a savings account or quality bond fund for that future purchase. As FarPlanner forecasts up to that 2 year out time, it mimics the $25,000 down payment. First is mimics a $25,000 transfer from your savings into your checking account. Then, it mimics a transfer from your checking account to the house payments expense category.
Spot Trouble Ahead
By doing all this forecasting work for you, FarPlanner can spot when your forecast accounts’ balances could go to $0. It then highlights the dashboard ‘color’ bar in red, as in this example:
Here, we see we might run out of funds by 2048. You should consider changing your plan now by boosting your income, retiring later or reducing spending.
The color bar shows yellow if your accounts’ balances at that time can’t fund current and future expenses. This just means you rely on future salary income in your plan to pay for things. That is a normal situation for most people before retirement.
The purple color is similar to yellow, but the forecast sees a large outflow from your accounts. Similar to red, you should consider changing your plan now by boosting your income, working longer or reducing spending.
A green color means your accounts’ balances can fund all expenses from that point forward into the future. Ideally the color bar is green from the year you retire on wards.
As you build your financial plan out in FarPlanner, and import your actual financials, your forecast and becomes more realistic.
Download and quickly build your FarPlanner plan for free today, then see what your financial future could hold.