Why I built Spend Enough

I've always been good at saving and bad at spending. Even when the numbers said we were fine, I didn't feel it. The future felt unknowable, and my habit was to throw up my hands, say we can never know, and keep saving out of fear.

Can we afford for me not to go back to work?

On maternity leave I wanted to play out whether we could afford for me not to go back to work, and what that would do to retirement. If we didn't save every spare dollar, would we still be okay? And if we did, were we going to end up with a pile at 80 that we wish we'd used at 40?

I tried to do it in a spreadsheet first. It was clunky to set up the formulas, and hard to get it to just show me what I wanted to see. I briefly looked at some of the FIRE tools and thought this is way too hard for an average person. I could probably do it, but I'm not really that type of nerd. I'm on the cusp of being able to understand it, but I would rather have something just tell me the answer in a way I can see, and let me mess around with it without having to change hundreds of inputs. What I kept wishing for was a button. Play out this scenario for me. What if I take two years off, what if we pay off the house. That became the preset scenarios. Could it also tell me which levers I'd have to move to reach a target? That became "what would it take." I couldn't find any of that at a price I'd pay, and I didn't want to hire a planner just to ask what-ifs. I'm a software engineer, so I built one.

What did it show me?

I was running the numbers to find out if we could live on one salary. We could, but stopping work now would add about ten years of working at the end of my career. I finally understood what the decision could cost and what it bought, and I felt at peace with it. Then my husband got laid off. I put the new numbers in and realized there was no need to panic. I'd wanted to know whether we could live on one salary. I'd always imagined it would be his.

The chart also showed me things I'd never had a way to see. How much we could actually spend each year. What our retirement accounts would grow to if we never put in another dollar. What working part time for a few years would do. I tend to think in all or nothing, and the chart kept showing me the middle.

What did I get wrong about certainty?

I thought there would be a number I could say, with 100% certainty, would last to the end of my life. I kept asking, okay, but what can I spend for sure? In historical mode there's an answer of sorts, the amount that came through every stretch of the market since 1926, and even that only means it hasn't failed yet. In simulated mode, where the tool makes up hundreds of possible futures, the amount that survived every single one was unrealistically small. You can certainly get to 100% if you never spend any money. That was the thing I had to get my head around. Certainty isn't on offer at any number. What is on offer is a plan that came through all but the few worst starting years of the last century, and the ability to see it coming and adjust if we ever land in one of those. That turned out to be enough.

What surprised me more was the spread. The same plan, run through every market history, ended anywhere from running out to several million dollars. The spread comes from the market. Thirty years of compounding turns a few bad years early on into a completely different life than the same bad years late. At first that made me feel like we can't know anything.

But a small change in what we spend moved that whole range, and changed how many of the histories failed, by more than I expected. I don't really understand statistics. Playing with the numbers made this much clear to me. I was looking for a number that is safe in every future, but I learned there isn't one. What you can know is the shape of the range, which outcomes are far more likely than others, and how much each choice moves them.

So what changed?

I feel empowered to turn the dials in our finances and adjust as we go. I chose to keep working. I work from home with my kid here, and we spend more on a nanny so I can. It gave me a way to look at a decision and see what it would do, and that has helped me let go of needing to over save out of fear. My past self already made sacrifices. Because she did, we can make these decisions now and be okay later. Using what she saved for the good life she was hoping for seems like the right way to thank her. It is giving me the confidence to spend enough on our life today instead of saving all of it for later. I hope it can do the same for you.