Online FAQs

  1. How often should i run Fearless Finance? You only have to run Fearless Finance once per year, at a life change (e.g. new job, new house), or as often as you want to check your progress. You don’t need to check any dashboards, just follow the recommendations and track your Blue Points and Groceries on the app (coming soon!).
  2. What if I’m self-employed/freelancer? If your income is lumpy or sporadic, either estimate your likely annual income for your pretax income or use last year’s income on your tax return after deductible expenses and before you paid your taxes, as your Pretax income. For your after tax income, take your pretax income and subtract either the amount of taxes you paid last year (if you used last year’s pretax income) or add up all your estimated quarterly tax payments (even the ones ou have not made yet, but expect to make) and subtract them from your estimated annual income for the current year. 
  3. Where do I find my After Tax income?  If you look on your paycheck for “net pay” or “net amount” or “net deposit” at the bottom of the statement, you will know how much you received in net pay for that PAY PERIOD. Make sure you know how often you are paid or when your pay periods are. You can also find your After Tax income by looking at what your employer deposits into your account on payday.
  4. Where do I find my Pretax income? This is a bit harder to find than your net pay. You can either put what you were quoted when you took the job, i.e. $80k/year, or $55/hour. Or, you can look on your paystub for the amount “gross for this period”, “amount before deductions” or “gross earnings this period.” Payroll companies have different names for it. Try to remember what your boss said you earned either when you were hired or at your last raise, whichever is more recent. Don’t forget to make sure the pay period is right. If you are quoting a “per year” amount, make sure it says Per Year.
  5. How do i know how often I’m paid?  If you are paid on the exact same dates each month like the 15th and 30th (or 31st if that’s the last date of the month) or 7th and 21st, you are paid twice PER MONTH. If the dates you are paid changes, e.g. you’re paid every other Friday, then you are probably paid every two weeks. TWICE PER MONTH AND EVERY TWO WEEKS ARE DIFFERENT.  Make sure you know which is right for your situation and make sure your click the right “period” when you enter your pre and after tax data.
  6. How do I add income from someone who rents a room in my house (non-job related income)? If you sell crafts on etsy, receive rent for a room/parking spot, alimony/child support, gifts or payouts from family/trusts, royalties, or monthly FSA/benefits reimbursements, click “add another income source” fill in the amount AND CLICK “NOT A JOB” so we don’t add it in for your retirement calculations. If you are not sure how much the amount is AFTER taxes, multiply the amount by your tax rate for a rough idea. If you are not sure if the amount is actually taxed, put in the same amount as pretax for Aftertax.  You may withhold enough from your job to cover a small amount of tax on some secondary income. Ask your accountant to be sure.
  7. What if i have multiple jobs/projects? Click “add another income source” and keep adding all of your gigs/jobs. 
  8. What if I contribute to an IRA and not my employer program? No problem, count the amount you contribute to your IRA plus whatever you contribute to your employer’s plan. For example, if you contribute 3% of your slaary to your employer plan ot get the match (good work!), and then max your IRA ($5500/year at this writing), and your annual preta salary is $60k, then you would put $5500+1800 = 7300/year in the “your retirement contribution” box.  We know you contributie $5500 because you max your IRA contribution, and we get $1800 by multiplying 0.03 (3%) times $60,000 (your annual salary).  
  9. How do I know how much I contribute to my retirement plan? Take a look at your paystub. There should be a line under “deductions” that says “401k plan EE” or “employee retirement” or something like that. EE, in this case stands for employEE.
  10. How do I know if my employer matches? This can be tough to figure out. Look at your pay stub.  It should indicate “ER contribution to retirement” or “401k match” or “employer contribution.” Payroll companies have different names for the same thing. If you are not sure, ask your Human Resources representative to confirm for you. Remember, you want to list the MAXIMUM employer match even if you are not currently contributing enough to get it.
  11. How do I estimate my monthly expenses? It can be difficult, but think about what your average bills are for your utilities, take a guess as to how much you spend on take out and going to eat. Don’t forget lunches at work and coffees. Look at your checkbook and recent transactions and see what you’ve spent. Don’t throw away the good for the perfect. Don’t worry about be exact to the penny on your dry cleaning or medical co-pays, make a good estimate and move on. 
  12. Where do I put vacations, house repairs, and camp? Things that come up once or twice per year or quarterly are Annual Expenses in Fearless Finance. We will cover all of these in your Annual Expense screen. Do not list these expenses in your Monthly Expenses unless you truly pay for them every month on a regular basis.
  13. What does Yellow/Green/Blue mean? Fearless Finance breaks up your expenses into types. Yellow is for contractual obligations like student loans, mortgage, and childcare. You have to pay it and it does not change month-to-month. Only list credit card minimums IF YOU DO NOT PAY THE ENTIRE BALANCE OFF EACH MONTH. Then just list the balance that does not get paid, e.g. the revolving balance.
  14. Where can i see my total spending after I put my estimates in? Look at the bottom of the “Monthly Expenses” screen to see your total estimated monthly expenses. It will also be divided up into Yellow, Green and Blue.  Your Summary Report (if you choose to purchase it) will have your full cash flow including what you need to save each month for Annual Expenses.
  15. It won’t let me move on from Monthly Expenses? That’s probably because your cash flow is not secure. That means the estimates you put in for your monthly expenses probably add up to more than you earn after taxes and benefits each month. Try clicking Monthly Expenses on the error page and trimming some of your expenses. It’s also possible you forgot some income. Make sure your Take Home/After Tax income is correct by clicking the income page and double checking your entries.
  16. What do you you mean by the “Amount to save monthly for Annual Needs”?  If you do not get a large bonus each year, it’s highly likely you have to save on a monthly basis for your Annual (or sporadic) Expenses like camp, vacations, life insurance, etc. We’ve calculated what you need to save each month to have enough for your Annual Expenses, based on the estimates you entered. That’s your “Amount to save monthly for Annual Needs.”
  17. It won’t let me move on from Annual Needs? That’s probably because the amount you need to save each month to pay for your Annual Expenses is more than what you have left each month after your estimated Monthly Expenses.  You have to trim your Annual Expenses and/or Monthly Expenses to  make sure you are spending less than you earn after taxes and benefits each month including what you need to save each Month for Annual Expenses.
  18. What is Emergency Savings? You can get a more in-depth explanation in this article about Emergency Savings. Briefly, Emergency Savings is specifically set aside (and kept liquid) for a TOTAL LOSS of income. Not for things that happen like car repairs, or emergency dental work.  A Total Loss of income is usually due to job loss, divorce, or medical/mental disability.  Emergency Savings is usually 3-6 months of your expenses because it could take you 3-6 months to find another job with similar pay to your current job, or to make major changes to lower your expenses like selling your house. 
  19. How is Emergency Savings different than Rainy Day Savings? Emergency Savings is for a Total Loss of income and Rainy Day Savings is for “stuff” that happens like car/home repairs, unreimbursed medical bills, emergency vet bills, etc. Rainy Day savings is for any unplanned, required expense not listed on your Monthly Expenses or Annual Expenses. 
  20. What if I underestimate my life expectancy?  Nobody knows what their life expectancy will be and it’s pretty unpleasant to think about.  Fearless Finance, keeps a bit of your retirement savings aside (about $200k) to make sure you have enough if you outlive your life expectancy.
  21. What is “annual cost of living increase” in my pension? Some pensions have a Cost of Living increase (also called a COLA), that allows your pensions to grow each year with expected inflation, which means the amount you actually receive should buy about the same amount from year to year regardless of inflation. Nobody is perfect at predicting inflation, but that’s what the goal is. Some pensions do not have it. YOu have to ask your pension administrator or Human Resources representative if you do not know.
  22. Why can’t I estimate the gains on my retirement funds? Lots of online retirement calculators allow you to estimate your gains on your retirement, but these gains can have a huge affect on your retirement funds.  As a result, Fearless Finance chooses a very conservative amount for gains after fees, and commissions to keep our retirement estimates consistent from user to user. The retirement calculator only provides a rough idea as a result. Actual results will vary.
  23. How can i find out how much i will get each month for my pension? Your pension administrator or Human Resources representative should be able to give you an estimate of your expected pension benefit.
  24. How can I get a will and the other documents you suggest? You can engage an estate attorney located in the state in which you live or use a reputable online provider.
  25. What’s the difference between whole and term life insurance (and universal and variable)? Whole, universal, and variable life insurance pay your beneficiary the face value of the policy whenever you die. At 39 or 99 years old as long as policy is valid and paid up.  Term life insurance only pays your beneficiary if you die within the TERM you purchased it for.  As a result, Term life insurance is usually cheaper.  Most people only need to replace their incomes either while their children are living at home and/or until the remaining spouse retires and can live off retirement funds. 
  26. What’s the difference between “until my child is economically independent” and “until my spouse is economically independent?” For most families, there is a period of time when the children are out the house and economically independent, but one or both spouses are still working (not retired yet).  If the remaining spouse can live off his/her earnings in this period before retirement and after the children have become economically independent, then a user might only require Term life insurance until his/her children are economically launched. If the remaining spouse still requires the deceased spouse’s income to pay for housing and save for retirement, then the user should consider having Term life insurance until the remaining spouse retires.
  27. What do I do with “Amount left in checking/Cushion?” Your “Amount left in checking/Cushion” is for SMALL things that come up each month and are not easily fit into a category like a new A/C filter, a slightly higher electric bill, extra data charges on your cell phone or a $50 fee for the minute-clinic.  Just leave that amount in your checking account each month and let it pool there. 
  28. What does “Employable Monthly Cash Flow” mean? Employable Monthly Cash flow is the amount you have each month, based on your estimates, to spend on General Savings (filling your Rainy Day Savings or Emergency Savings), paying down debt (e.g. paying off credit cards or a loan from family) or goals (e.g. paying for a math tutor or a new car). It’s not earmarked for anything except achieving your savings, security retirement security and goals. Fearless Finance will recommend how to use it in the REcommendations section of your Summary Report.
  29. What if I have negative net worth? Don’t worry, lots of people have negative net worth if they are young or straight out of college/graduate school.  Just focus on increasing savings and reducing debt. Fearless Finance will help you do that with the Recommendations section of the Summary Report.
  30. How many accounts should I have? For a household where nobody is self-employed, you should have one joint checking account (if married), and two savings accounts: your Rainy Day Savings/Annual Expenses account and your Emergency Savings. Read more about account organization here. 
  31. Should I share accounts with my spouse? Fearless Finance believes shared accounts between spouses is the most efficient way to go, because there is more transparency and less cash “seepage.” Cash Seepage is when there’s a few dollars here or there and nobody’s really counting it and therefore it gets spent. The more checking accounts you have, the more cash seepage there will be.
  32. How do i save for my annual needs? If you do not get a bonus or other large annual payment, you will need to save monthly for your Annual Expenses. Fearless Finance recommends you save each month into your Rainy Day Savings/Annual Expenses account and when you need to pay for annual expense like a vacation, you take the money out of the account and pay the bill. It’s okay to charge vacations and other Annual Expense on your credit card, but take the money from your Rainy Day Savings/Annual Expense account and pay the Annual Expenses bill in full when it arrives.
  33. What does the retirement calculator recommendation mean by “Your household will have…”? Fearless Finances retirement calculator allows you to see a rough estimate of what you will have each month AFTER estimated taxes, in today’s dollars.  We estimate your tax burden in your future retirement. Our assumptions can be inaccurate as tax policy changes and your specific situation may change. We also assume a certain amount of gain for your current and future savings, as well as a rate of inflation. All these assumptions are subject to change and therefore we urge you to use the retirement calculator as a guidepost only.  Fearless Finance still encourages you, no matter what the calculator says, to save at least 15% of your gross income to a retirement account and try to be housing secure in retirement meaning you do not have a rent or mortgage payment. 

 

Did this answer your question?