Savings target · AUD
Save A$100,000 in 9 months
That is A$11,111 every month for 9 months, which works out at A$365.05 a day. The number is the easy part; which envelope pays for it is the question this page answers.
- Every fortnightA$5,128
- Every weekA$2,564
- Every dayA$365.05
- Entries to make274 days
Money stops coming out of discretionary spending alone at A$50 a day, where the rule is drawn. This target sits above it.
Nothing in the Optional envelope reaches a figure like this. Either the horizon stretches, a fixed cost changes materially, or income does.
Over half a year the plan will meet at least one unexpected expense. That is what the Extra envelope is for, and a plan that has not funded it will raid the savings instead.
What this asks of your income
The ladder simply runs the division backwards: A$11,111 a month is twenty percent of A$55,556, ten percent of A$111,111, and thirty percent of A$37,037. Find your own income on it and you know what you are asking of yourself.
- 10%A$111,111 a month take homeA$100,000 left to live on
- 15%A$74,074 a month take homeA$62,963 left to live on
- 20%A$55,556 a month take homeA$44,444 left to live on
- 25%A$44,444 a month take homeA$33,333 left to live on
- 30%A$37,037 a month take homeA$25,926 left to live on
The dark slice is A$11,111, the same money on every rung. What changes behind it is the pay packet it has to come out of, which is the whole reason a savings rate is a better question than a savings amount. The marked rung is twenty percent.
Which envelope pays for it
Kakeibo sorts spending into four envelopes rather than dozens of line items, and that is what makes a question like this answerable.
- Survivalwhat keeps the lights on: rent or mortgage, groceries, power, rego and fuel, insurance
- Optionaltakeaway, subscriptions and the shopping you would not miss
- Culturea course, a gallery membership, books
- Extrathe irregular hit: car repairs, a wedding gift, the vet
A$11,111 a month, carved
- Optional30%A$3,333
- Culture10%A$1,111
- Extra10%A$1,111
- Survival50%A$5,556
Total moved to savingsA$11,111 a month
Splitting it across Optional, Culture, Extra and Survival is one way to arrange it, and the Survival line is the honest part: at A$11,111 a month, no rearrangement of takeaway, subscriptions and the shopping you would not miss covers the whole figure. Survival means fixed costs, so that share is a housing, transport or insurance decision rather than a willpower one.
At this magnitude the plan should be written down properly, with the assumptions visible, because you will be reading it back in a very different year.
The four questions, against this target
The method is four questions asked once a month, in that order. Here they are with this page's numbers in them. The long version of each, with the reflection prompts, is in the four questions guide.
- 01How much money do you have?Everything that lands in the month, before anything is committed. The plan below only works from a real figure rather than a remembered one.
- 02How much would you like to save?A$11,111 a month, or A$11,200 if you would rather set a round standing transfer and finish early.
- 03How much are you spending?Recorded by hand, in four envelopes, as it happens. This is the part that makes the A$100,000 possible, and the part every method skips at its peril.
- 04How can you improve?Answered once a month for 9 months, in writing, against the running total rather than against a feeling.
- A$500A$55.56A$1.83
- A$1,000A$111A$3.65
- A$2,000A$222A$7.30
- A$3,000A$333A$10.95
- A$5,000A$556A$18.25
- A$7,500A$833A$27.38
- A$10,000A$1,111A$36.50
- A$15,000A$1,667A$54.76
- A$20,000A$2,222A$73.01
- A$25,000A$2,778A$91.26
- A$30,000A$3,333A$109.51
- A$50,000A$5,556A$182.52
- A$75,000A$8,333A$273.79
- A$100,000A$11,111A$365.05This page
A$365.05 a day is above the A$50 a day line, so part of the money has to come out of fixed costs rather than out of Optional. It stays above the line on every horizon on the grid; 66 months is where the arithmetic first clears it.
The same target in another currency
Or work from your own figures in the save an amount by a date calculator, and start from the method itself in what is kakeibo.
Common questions
- How much do I need to save each month to reach A$100,000 in 9 months?
- A$11,111 a month. Set it to A$11,200 and you arrive early with a small cushion, which is usually worth more than the exact figure.
- What is that per week and per day?
- A$2,564 a week, A$5,128 a fortnight, and A$365.05 a day across roughly 274 days.
- Which kakeibo category should the money come from?
- Start with Optional. On this target it carries about 30 percent of the monthly figure, which is A$3,333. The ledger tells you the specific lines within a fortnight.
- What happens if I miss a month?
- The shortfall spreads across what is left. Missing one month here adds about A$1,389 to each remaining month, so it is recoverable, and the monthly reflection is where you decide whether to absorb it or move the date.
A$11,111 a month is arithmetic. Holding it is the ledger.
Kakeibo works because you write the spending down as it happens and read it back once a month. The app does the totals so the writing down is the only work left.
