Financial Planner
Provides financial planning logic to inform automated money allocation.
Core Framework: The Allocation Hierarchy
Priority order (fund in sequence):
- •Minimum debt payments - Always first
- •Small emergency buffer - $1,000 starter
- •Employer 401k match - Free money, never skip
- •High-interest debt - >7% APR
- •Full emergency fund - 3-6 months expenses
- •Retirement accounts - Max tax-advantaged
- •Other goals - House, education, etc.
Age-Based Allocation Guidelines
See references/age-allocations.md for detailed breakdowns.
Quick reference:
| Age | Savings | Debt | Investments | Notes |
|---|---|---|---|---|
| 18-24 | 10-15% | Aggressive | 5-10% | Build habits, starter emergency fund |
| 25-34 | 15-20% | High priority | 15-20% | Peak debt payoff years, start retirement |
| 35-44 | 15% | Moderate | 20-25% | Balance growth and security |
| 45-54 | 10% | Low | 25-30% | Catch-up contributions, reduce risk |
| 55+ | 5-10% | Minimal | 15-20% | Preserve capital, prepare distribution |
Income-Based Rules
See references/income-rules.md for detailed breakdowns.
Emergency fund sizing:
- •Under $50k income: 3 months expenses
- •$50k-$100k: 4 months expenses
- •$100k-$250k: 5 months expenses
- •Over $250k: 6 months expenses
Tax reserve (self-employed/business):
- •Base rate: 25-30% of gross income
- •High earners ($250k+): 35-40%
- •Adjust for state taxes, deductions
Occupation-Based Strategies
See references/occupation-strategies.md for details.
Income stability affects allocation:
| Stability | Emergency Fund | Debt Aggression | Investment Risk |
|---|---|---|---|
| High (salaried, govt) | 3 months | Aggressive | Higher |
| Medium (professional) | 4 months | Moderate | Moderate |
| Variable (freelance, sales) | 6 months | Conservative | Lower |
| Seasonal (construction, tourism) | 6+ months | Very conservative | Lower |
Family Status Adjustments
- •Single, no dependents: Higher risk tolerance, aggressive debt payoff
- •Married, no kids: Coordinate benefits, joint emergency fund
- •With children: Increase emergency fund +1 month per child, add education savings
- •Single parent: Conservative approach, larger emergency buffer
Business Owner Specifics
See references/business-allocation.md for Profit First and other frameworks.
Recommended allocation (Profit First method):
| Revenue | Profit | Owner Pay | Tax | Operating |
|---|---|---|---|---|
| <$250k | 5% | 50% | 15% | 30% |
| $250k-$500k | 10% | 35% | 15% | 40% |
| $500k-$1M | 15% | 20% | 15% | 50% |
| >$1M | 20% | 10% | 15% | 55% |
Debt Payoff Strategies
Avalanche (mathematically optimal):
- •Pay minimums on all debts
- •Extra payments to highest interest rate first
- •Best for: disciplined, motivated by math
Snowball (psychologically effective):
- •Pay minimums on all debts
- •Extra payments to smallest balance first
- •Best for: need quick wins, multiple small debts
When to use which:
- •High-interest debt (>15% APR): Always avalanche
- •Similar rates (<3% difference): Snowball for motivation
- •Large balances with high rates: Hybrid approach