Benefit of Spending Less

Reducing your spending can be worth more than you might think. Use this calculator to see just how much your budget reductions may be worth, if you were to invest them. View the value of this new potential nest egg both with and without taxes factored in.

Spending Less Results

You could save TAX_DEFERRED_TOTAL in YEARS_OF_SAVING years.

**GRAPH**

By spending MONTHLY_SAVINGS less per month and investing that amount at RATE_OF_RETURN you could save TAX_DEFERRED_TOTAL before taxes in YEARS_OF_SAVING years. If you pay taxes on your savings, this amount would be reduced to SAVINGS_TOTAL with a combined state and federal marginal tax rate of MARGINAL_TAX_RATE.

Results Summary
Monthly savings (from spending less)	MONTHLY_SAVINGS
Total savings before taxes (or tax-deferred)	TAX_DEFERRED_TOTAL
Total savings after taxes	SAVINGS_TOTAL

Your input values

Input Summary
Monthly savings	MONTHLY_SAVINGS	Years to save	YEARS_OF_SAVING
Rate of return	RATE_OF_RETURN	Total contributions over YEARS_OF_SAVING years	TOTAL_CONTRIBUTIONS
Federal tax rate	FEDERAL_TAX_RATE	State tax rate	STATE_TAX_RATE

Proposed Monthly Spending Decreases

Entertainment expenses:

Eat out less EAT_OUT_LESS Fewer vacations FEWER_VACTIONS

Fewer movies FEWER_MOVIES Other entertainment savings OTHER_ENTERTAINMENT

Budget expenses:

Clip coupons CLIP_COUPONS Pay off credit cards PAYOFF_CREDIT_CARDS

Wait to purchase new car WAIT_FOR_NEW_CAR Other budget savings OTHER_BUDGET

Utility expenses:

Disconnect cable TV DISCONNECT_CABLE_TV Eliminate cell phone ELIMINATE_CELL_PHONE

Reduce long distance costs REDUCE_LONG_DISTANCE Other utility savings OTHER_UTILITY

Savings balances by year

**REPEATING GROUP**

This Financial Calculator requires SUN's Java™ Plug-in. If you see this message you will need to download SUN's Java™ Plug-in. This can be done automatically by clicking the yellow bar at the top of your browser and choosing “Install ActiveX Control”.

Get the Java™ Plug-in!

For more information about this Plug-in please visit: SUN's Java™ Plug-in
For more information about savings calculators please visit: Savings Calculators from KJE Computer Solutions, LLC

Definitions

Monthly savings
The total amount that you could invest per month by spending less. This amount is calculated by adding up your potential entertainment, budget and utility savings.

Annual rate of return
This is the annually compounded rate of return you expect from your investments. The actual rate of return is largely dependent on the types of investments you select. The S&P 500 for the 10 years ending Dec. 31st, 2012 had an annual compounded rate of return of 7.1%, including reinvestment of dividends. From January 1970 through the end of 2012, the average annual compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 10.1% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a bank may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that funds and/or investment companies may charge.

Years to save
The total number of years you plan to save.

Federal tax rate
The federal tax rate you expect to pay on your taxable investments.

State tax rate
The state tax rate you expect to pay on your taxable investments.

Total savings before taxes
Total value of your savings before taxes are taken into account. Most regular savings accounts and investment accounts are taxable. However, if your savings is being invested into a tax-deferred or tax-free investment this total may be important to you.

Total savings after taxes
The total amount you would have accumulated in a taxable account. All taxes are assumed to be paid as your earnings accrue.