Foundations


Personal finance is mostly behavior and a small amount of math. The math matters (compounding, interest rates, tax-advantaged accounts), but most of your personal finances depend on your habits. These three questions will determine how much money you’ll have at any point in your life:

  1. Are you spending less than you earn?
  2. How much are you saving?
  3. How much are you investing (and are you leaving it alone through economic downturns)?

Before you optimize investments or chase tax savings, the foundations need to be in place: awareness of where money goes, a working budget, a plan for any high-interest debt, and a buffer against bad surprises.

This part walks through those foundations in order:

  1. Income: how to think about what comes in, your “human capital,” and the gap between earning and spending.
  2. Tracking Spending: you only manage what you measure, and you should try to capture every dollar before you try to direct it.
  3. Budgeting: a working framework for allocating what you’ve captured, rather than restricting your way to misery.
  4. Managing Debt: which debts to clear first, and why high-interest debt is wealth-destroying compounding in reverse.
  5. Emergency Fund: a 3–6 month buffer so one bad surprise doesn’t undo your progress.

Tech stack

As I write this book, we’re in the midst of an “AI revolution.” It’s impossible to predict which technologies will be most useful or relevant for you as a reader. I’ve chosen Excel because spreadsheets remain a near-universal tool in business, and they’re invaluable for managing information. The programming languages I reference are open-source and free, making them accessible and durable choices.

If AI systems are handling most technical tasks by the time you read this, consider the next pages a snapshot of how people once approached numbers and information—an artifact from before automation took over.

Time horizons

Money you need in 12 months should not look like money you won’t touch for 30 years. The rest of the book builds on that distinction.

Once the foundations are in place, the next lever is Savings: turning the gap between income and spending into a deliberate, recurring habit.