Expert review reference
This page documents the calculations currently running on Money-Wise. It is a review document, not financial advice. Any agreed formula changes should be versioned, tested against expert-approved examples, and reflected here.
01
Bucket total: sum of all line items in that bucket.
Total expenses: Essentials + Future-you + Lifestyle.
Remaining: Monthly net income − Total expenses.
Bucket percentage: round(Bucket total ÷ Monthly net income × 100).
Guideline checks: Essentials ≤ 50%; Future-you ≥ 20%; Lifestyle ≤ 30%.
The 50/20/30 split is guidance, not a forecast. If income is zero, the interface uses 1 only to prevent division by zero.
02
Fixed monthly debt budget: Extra payment + sum of every debt's original minimum payment.
Monthly interest per debt: Opening balance × (Annual percentage rate ÷ 100 ÷ 12).
Monthly sequence: add interest to every open debt; pay each open debt's minimum; direct all remaining budget to the selected target.
Snowball target: smallest outstanding balance first.
Avalanche target: highest annual interest rate first.
Rollover: when a debt clears, its former minimum remains in the fixed monthly budget and is redirected to the next target.
Total interest: sum of monthly interest charged across all debts until payoff.
Safety limits: the result is rejected if the balance does not fall after a month or if payoff exceeds 600 months.
Rates are treated as nominal annual rates divided by 12. The model does not include penalties, changing rates, payment dates, taxes or new borrowing.
03
Periodic rate: Annual rate ÷ Compounding periods per year, where periods are 12 for monthly or 1 for annual.
Equivalent monthly growth rate: (1 + Periodic rate)Compounding periods ÷ 12 − 1.
End-of-month contribution: New balance = Previous balance × (1 + Monthly growth rate) + Monthly contribution.
Beginning-of-month contribution: New balance = (Previous balance + Monthly contribution) × (1 + Monthly growth rate).
Total contributed: Starting amount + Monthly contribution × Number of months.
Today's-money value: Future value ÷ (1 + 7%)Years.
Cost of waiting five years: Full-horizon future value − value produced over five fewer contribution years.
Returns are constant and before fees and tax. Contributions are fixed; volatility and sequence-of-returns risk are not modelled.
04
Target fund: Essential monthly expenses × Selected months of cover.
Funding gap: max(0, Target fund − Amount already saved).
Funded percentage: min(100, round(Amount saved ÷ Target fund × 100)).
Months to target: ceiling(Funding gap ÷ Monthly contribution).
Suggested cover: 3 months for stable salary, 6 months for mixed income, and 9 months for hustle/freelance income.
No return is earned on the fund in the current calculation, and expenses and contributions are assumed constant.
05
Monthly rate: Annual growth rate ÷ 100 ÷ 12.
Number of deposits: Years to goal × 12.
Monthly contribution for one goal: Goal amount × Monthly rate ÷ ((1 + Monthly rate)Number of deposits − 1).
Total monthly contribution: sum of the calculated monthly contributions for every goal.
Goal share: round(Goal's monthly contribution ÷ Total monthly contribution × 100).
This is an ordinary future-value annuity, so deposits are treated as end-of-month. Existing savings, inflation, fees, tax and varying returns are not included.
06
Monthly rate: Annual interest rate ÷ 100 ÷ 12.
Monthly repayment: Principal × r × (1 + r)n ÷ ((1 + r)n − 1), where r is the monthly rate and n is the number of months.
Zero-rate repayment: Principal ÷ Number of months.
Upfront fees: Principal × Fee percentage ÷ 100.
Total repaid: Monthly repayment × Number of months + Upfront fees.
Total borrowing cost: Total repaid − Principal.
Repayment per 100 borrowed: round(Total repaid ÷ Principal × 100).
Current verdict bands: under 15% above principal = reasonable; 15%–44.99% = expensive; 45% or more = danger zone.
The model assumes a reducing-balance amortising loan with a constant nominal rate. It does not model flat-rate loans, declining fees, taxes, late charges or insurance paid over time.
07
Years to retirement: Retirement age − Current age.
Monthly accumulation rate: Expected annual growth rate ÷ 100 ÷ 12.
Accumulation loop: each month, New balance = Previous balance × (1 + Monthly rate) + Monthly contribution.
Future monthly income: Desired income in today's money × (1 + Income growth rate)Years to retirement. The income growth rate is adjustable from 0% to 10% per year (default 7%) and is shown on the calculator beside the income input.
Required retirement fund: Future monthly income × 12 ÷ Annual growth rate. The fund is sized so its investment yield pays the target income while the capital itself is preserved.
Income the projected fund can pay: Projected fund × Annual growth rate ÷ 12, shown beside the projected fund so the two figures can be compared directly.
Readiness percentage: Projected retirement fund ÷ Required retirement fund × 100.
Extra monthly contribution: Funding gap × Monthly rate ÷ ((1 + Monthly rate)Months remaining − 1).
Updated after expert review, August 2026: the earlier 5% sustainable-withdrawal model was replaced with this investment-yield model, and the fixed 7% inflation assumption became an adjustable income growth rate. The model does not yet include taxes, fees, pension or other guaranteed income, or contributions that rise with salary.
08
This is a guided prioritisation exercise rather than a financial calculator.
Selection stages: choose 40 values, then 20, then 10, then a final five.
Pressure test: the user records whether each final value is freely chosen, visible in behaviour, defensible under pressure, and worth its trade-offs.
Output: ranked values, personal definitions, reflections and commitments. No monetary forecast or score is produced.