The Financial Dipstick

About the Book

This handbook was generated to provide an aid to management of monthly income. It should be useful to a wide range of income groups and age groups. The book is based on the simple premise that monthly income can be managed best by knowing one’s average monthly Discretionary Use Income and by determining one’s Actual Savings at the end of each month. Actual Savings, in this handbook, is the amount of monthly income remaining in fluid and semi-fluid assets which exceeds monthly escrows required for Periodic Bills and Anticipated Future Random Expenses.

The handbook provides tools for efficiently managing one’s monthly income. The first of these tools is the Reference Budget Spreadsheet. This is used at the beginning of the month. It provides a comprehensive format for estimating one’s Discretionary Use Income in the environment of all financial commitments. The budget is supported by: a diagram of Reference Budget Terms; an explanation of terms; examples of escrowing for Periodic Bills; examples of Random Expenses experienced by the author; examples of escrowing for Anticipated Future Random Expenses; and a list of sample content for the budget. The Introduction develops an appreciation for the fact that escrowing and saving are different and that one must “escrow as you go”.

The second of these tools is the Financial Dipstick and Dipstick Analyzer Spreadsheet . This is used at the end of each month. It efficiently determines one’s Actual Savings from monthly income. Positive savings indicate that one has stayed within the limits of discretionary spending and has escrowed the required amount for near term bills and future expenses. This tool is supported by: a Diagram of Financial Dipstick and Dipstick Analyzer Terms; an explanation of terms; sample content for the Dipstick and Dipstick Analyzer Spreadsheet; and explanation of usage of the sample spreadsheet. The Introduction emphasizes that Actual Savings must be measured at the end of the month regardless of one’s initial budget which is only a plan and that there is an efficient way to do this.

The Financial Dipstick is so named because all of one’s fluid and semi-fluid assets are treated as being mixed in one “financial tank” and the Financial Dipstick, figuratively speaking, “dips into” this tank to get an absolute reading of Total Assets at the end of each month. In this handbook “Total Assets” means total fluid and semi-fluid assets. The Dipstick Analyzer is so named because it “processes” the change in Total Assets from month to month to determine one’s Actual Savings at the end of each month. These tools work together, as illustrated in the handbook introduction.

One can implement the “tools” presented by copying spreadsheet samples and customizing these as required.

The ultimate goal of using tools that estimate average Discretionary Use Income and determine Actual Saving at the end of each month is to achieve optimum benefit from income while minimizing exposure to “financial surprises”.

About the Author

The author, Herman P. Fischer, was continuously employed as an engineer in the electronics industry from 1960 to retirement in 1991. He always felt equally challenged, like most of us, in meeting personal financial commitments. The goal while he and his wife, Loretta, raised five children, relocated, sent all children to college, and eventually retired was to stay “on top” of expenses. To do this Mr. Fischer developed charts which would give monthly status of the family’s Fluid and Semi Fluid Assets relative to monthly, periodic, and anticipated future random expense commitments. He has converted these charts to spreadsheet tools with detailed introduction and explanation