Personal Finance: a field manual

Author

Martin Frigaard

Welcome!

This is a Personal Finance field manual: a working reference for the day-to-day decisions that shape your financial life. It covers budgeting, saving, borrowing, investing, taxes, insurance, and planning.

TipWho this book is for

The primary audience for this book is my children. It contains some of the basic principles I was taught (and others I’ve learned painfully) about managing personal finances.

This book aims to answer questions like:

  • “Where is my money going each month?”

  • “How much should I have in an emergency fund?”

  • “Should I pay down debt or invest first?”

  • “Which retirement account makes sense for me?”

  • “How do I pick an index fund?”

ImportantWho wrote this?

Given the current landscape of online resources and the impressive capabilities of AI/large language models (LLMs), I feel it’s important to clarify the authorship of this book. It seems strange to have to include this in anything I write, but it’s something that, if I were reading a book, I’d like to know.

I wrote all of the narrative, commentary, and explanations. I used LLMs (mostly Claude) to research specific topics (like FDIC/NCUA coverage), but the thoughts in the book are my own. Hopefully, the typos and/or grammatical errors serve as a signature of authenticity.

The code in this book was created with the assistance of Claude, and this applies only to the specific chapters explicitly noted. Generally, I’d write a ‘first draft’ of a code example, then ask Claude how to improve it. Sometimes I agreed with its suggestions (and included them), other times I revised the code myself.

How this book is organized

The book is divided into five parts:

  1. Foundations: income, tracking spending, budgeting, debt, and emergency funds.
  2. Savings: savings strategies, high-yield accounts, and automation.
  3. Investing: the basics, retirement accounts, index funds, and asset allocation.
  4. Taxes & insurance: the protective layer around your finances.
  5. Planning: goals, major purchases, and estate planning.

The five sections of the book map into four levers:

The four levers

Lever Question
Income How much comes in?
Spending How much goes out?
Savings How much is set aside?
Investing What happens to the rest?

The diagram shows how the levers connect, and which part of the book covers each one.

%%{init: {'theme': 'neutral', 'themeVariables': { 'fontFamily': 'monospace', "darkMode":false, "fontSize":"16px"}}}%%

flowchart LR
    subgraph Foundations["<strong>Foundations</strong>"]
        Income("Income<br>How much comes in?")
        Spending("Spending<br>How much goes out?")
    end
    subgraph SavingsPart["<strong>Savings</strong>"]
        Savings("Savings<br>How much is set aside?")
    end
    subgraph InvestingPart["<strong>Investing</strong>"]
        Investing("Investing<br>What happens to the rest?")
    end
    Income --> Spending
    Spending --> Savings
    Savings --> Investing
    style Income fill:#48a56a,color:#F5F2E8,stroke:#1C1C1E,stroke-width:2px
    style Spending fill:#0e9aa7,color:#F5F2E8,stroke:#1C1C1E,stroke-width:2px
    style Savings fill:#0e9aa7,color:#F5F2E8,stroke:#1C1C1E,stroke-width:2px
    style Investing fill:#48a56a,color:#F5F2E8,stroke:#1C1C1E,stroke-width:2px
    style Foundations fill:#FFFFFF,color:#1C1C1E,stroke:#1C1C1E,stroke-width:2px
    style SavingsPart fill:#FFFFFF,color:#1C1C1E,stroke:#1C1C1E,stroke-width:2px
    style InvestingPart fill:#FFFFFF,color:#1C1C1E,stroke:#1C1C1E,stroke-width:2px

The Four Levers

Each lever has its own part in this book:

  • Foundations: Income, budgeting, and spending are the behaviors that will have the biggest impact on your financial health. You’ll also want to manage the money you borrow, and plan for emergencies.
  • Savings covers different ways to put money aside, different kinds of savings accounts, and the most important behavior for disciplined savings: automation.
  • Investing is what happens to the money you save over the long term.
  • Taxes & insurance & Planning sit around the outside.

Each chapter is short and self-contained so you can jump in where you need to.

Math

Whatever math is covered in this book can be done with a calculator, spreadsheet, or some basic programming skills. If you’re interested in following along or performing any of the calculations yourself, I’ve provided examples in Microsoft Excel and both R and Python.

Example R code:

1000 * (1 + 0.05)^10  # future value of $1,000 at 5% for 10 years
#> [1] 1628.895

Example Python code:

1000 * (1 + 0.05) ** 10
#> 1628.894626777442

If you’re interested in programming, the book also has an accompanying website where I dive a little deeper into R/Python functions, package development, and how to create interactive web applications using the Shiny framework.

About the author

Martin Frigaard writes about R packages, Shiny applications, and, now, personal finance.