Write down the expense
Start a goal record with an expense: a home deposit costing €20,000 today, payable in five years, in euros. This hypothetical example gives the money a job and a deadline. Record the minimum acceptable outcome; refine local moving costs, fees and taxes as plans become clearer.
The time horizon ends at spending, not at your preferred sale date. Retirement has several horizons: first-year expenses and money invested for another twenty years need different dates.
State whether the amount is in today’s prices
“€20,000 in five years” can mean a fixed future amount or the future cost of something priced at €20,000 today. The deposit in our example uses today’s prices, so its future cost needs a separate estimate.
Today€20,000Current cost
In five years€23,200Future cost, rounded
→ Five years of assumed 3% annual increases in this goal's cost.
An invented scenario, not a forecast. Rounded to the nearest €100; a particular expense may rise differently from a broad inflation index.
Find the gap before assuming a return
Assign capital and affordable contributions only once, keeping bills and reserves separate.
Future-money target €23,200
Assigned today €5,000
Separate from bills and reservesFuture contributions €9,000
60 months × €150; still to be paid inStill unfunded €9,200
No money assigned to this part yet
Today's money + planned contributions → €14,000 by the date.
Full strip = the rounded €23,200 cost. Assumes no investment returns, fees or taxes; future contributions depend on being able to keep paying.
To address the gap, examine the target, date, contributions or income. Entering a higher return in a spreadsheet does not supply money; taking more risk can leave a larger shortfall.
Price and fund a five-year goal
The assumed price increase gives €20,000 × 1.03⁵ ≈ €23,185, rounded to €23,200. Historical inflation calculators describe the past, not this future bill.
Funding before returns and costs is €5,000 + 60 × €150 = €14,000; €23,200 − €14,000 = €9,200 remains unfunded.
After the initial €5,000, €18,200 ÷ 60 ≈ €303.33 monthly would cover the rounded target; €304 slightly exceeds it before returns and costs. If that is unaffordable, change a real part of the plan.
Use the currency of the payment
An unchanged dollar balance can buy fewer euros when a euro course fee is due. Record the spending currency; if your future location is uncertain, test more than one location and refine the goal later.
Convert the same dollar balance at two rates
At invented exchange rates, $12,000 ÷ $1.20 per euro = €10,000; $12,000 ÷ $1.50 per euro = €8,000. The second leaves €2,000 missing from a €10,000 fee. Conversion costs ignored; the actual rate and charges matter when paying.
The spending currency is a unit for the goal, not a complete portfolio currency policy. A fund’s trading currency does not identify all its currency risks.
Specify what can change without harm
Write how far the date can move and the amount can fall. Delaying three months differs from delaying several years. Being calm about losses does not make a compulsory payment flexible, and no anniversary makes risky assets safe.
Compare compulsory tuition in eighteen months with an optional trip in fifteen years. What would 20% less money just before spending mean for each? This is a stress scenario, not a predicted loss or suggested risk limit.
Add the funding and flexibility limits to the same goal record. Update it when a quotation, income, location or deadline changes; review fixed payments as they approach, even after a market rise.
Write a goal record from a fresh balance
On 22 October 2026, a hypothetical balance is €9,500: €1,500 is assigned to a known annual bill and €4,000 to a separately chosen reserve. There are no other commitments in this exercise. A fixed €10,000 payment is due on 22 October 2029, in nominal euros. €125 is available at the end of each of the 36 months. Ignore investment returns, costs and taxes.
Write one record with the capital assigned to this goal, payment date, currency and price basis, contributions, funding gap, a permissible change and one unknown to verify. Keep the reserve and annual bill assigned once.
Compare a goal record and its funding trail
22 October 2026 · €9,500, assigned once
€8,500 available → €1,500 still missing → €10,000 bill
The record uses €4,000 now and €4,500 of future contributions: €8,500 against €10,000, leaving €1,500. Before investment results, the monthly contribution needed is (€10,000 − €4,000) ÷ 36 ≈ €166.67; €167 rounds upward. That change works only if genuinely affordable.
A smaller expense or a different deadline is another possible revision if the terms allow it. A higher assumed return supplies no missing money. For example, verify whether the price and deadline are final from the supplier’s written terms.
Check that your amounts add up, existing commitments remain separate, and the record says fixed future nominal euros. A different proposed change is valid when its funding and conditions are explained.
Keep the price basis and period with the goal. Next, measure investment results in consistent units before deciding what those results could fund.