Compare 20-year net worth at a disciplined savings rate vs creeping lifestyle inflation.

Saving 1,500 a month at 7% over 20 years builds roughly 781,000. Saving 500 a month under the same terms builds roughly 260,000. The 521,000 gap comes entirely from the extra 1,000 a month maintained over the full horizon — what lifestyle inflation typically eats when raises are absorbed into spending rather than saved.

How to use it

Enter the monthly savings under the 'frugal' path (what you'd save if you kept spending flat as raises come in) and under the 'lifestyle' path (the lower savings rate after spending rises with income). Use an expected annual return for both.

What the result means

Primary is the gap in final net worth between the two paths. Secondary shows each path's ending value and the compound growth difference. The point isn't that lifestyle inflation is wrong — it's that the long-run cost is often invisible without running numbers.

What this illustrates

Small monthly differences compound into huge long-term gaps. A 1,000 monthly spending gap over 20 years isn't worth 240k in cash — at 7% return it's worth 521k in future-value terms. Recognising that makes the 'should I upgrade my car' question more concrete.

Quick example

With frugal path monthly savings of 1,500 and lifestyle inflation path monthly savings of 500 (plus annual return of 7% and years of 20 years), the result is 520,926.66. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.

Which inputs matter most

You enter Frugal Path Monthly Savings, Lifestyle Inflation Path Monthly Savings, Annual Return, and Years. Two inputs usually tip the answer one way or the other. Identify which ones matter most by flipping each value past a round threshold and watching whether the winning option changes.

What's happening under the hood

Future value of annuity for each monthly amount, then the difference between the two. Uses monthly compounding with end-of-month contributions. Assumes constant monthly savings on each path — in practice both rise over time, but the gap behaves similarly to a constant comparison. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.

Using this to think, not predict

Financial plans are wrong by month six — new information arrives and reshapes the picture. The point of running projections isn't to be right in ten years; it's to be less wrong in the decision you're making this week.

What this doesn't capture

Real plans get re-run against new information every year or two. The result here is a reasonable direction, not a destination. Treat it as a starting point for thinking, not a commitment to a specific future.