How to Find Your Freedom Number

By the end you'll have your Freedom Number: the extra monthly income your business needs to provide, after tax, for your household to reach its goal.

Before You Start

The Freedom Number calculator is free on every plan, and it takes about 15 minutes. Have these ready:

• What your household spends each month, and the bills that arrive a few times a year (insurance premiums, property tax, holidays).
• Your other income: a paycheck, rental income or investment income, if you have any.
• Your tax basics: filing status, state, city, age, dependents and deductions.

Take the hypothetical owner of Greenline Landscaping, a single filer in a state with no income tax. The household needs $6,000 a month after tax, which includes $500 for retirement and $550 for health insurance. That $6,000 is the goal the calculator works back from.

Steps

Open "Me" in the navbar to reach the Freedom Number. Each step unlocks the next one, so work through them in order.

1. "Financial Goal": set the goal you want the business to fund.
2. "Income Sources": tell the calculator what income you have besides the business.
3. "Monthly Expenses": enter what the household spends in a normal month.
4. "Irregular Expenses": add the costs that don't arrive every month.
5. Income detail steps, only if they apply to you: "W-2 Employment", "Self-Employment", "Rental Properties" and "Investment Income". You'll see only the ones that are relevant.
6. "Tax Profile": filing status, state, city, age, dependents and deductions. This is the one tax profile your account keeps. Blueprints and My Business read the same profile, so editing it here updates them too.
7. "Results": the calculator shows your number.

What You'll See

The Results page leads with "Freedom Number: $X". That figure is monthly, and it is the income your business has to add on top of everything else you entered, after tax.

Below it, "Here's how you can get to $X/month:" lays out the path, and "Your Next Steps" offers three moves:

• "Refine Your Numbers" to tighten an estimate.
• "Adjust Safety Buffer" to change the cushion added on top of your expenses for unexpected costs. It starts at 20%.
• "Explore Scenarios" to see how the number moves when the inputs change.

"Design Your Blueprint" takes the number into a plan for the business itself. Once every step is complete, the dashboard also adds "What-If Scenarios".

A monthly number is the useful form, because it's what you can hold the business to each month. If Greenline's owner has no other income, the Freedom Number is the monthly amount the landscaping business has to hand the household, after tax, to cover that $6,000. For how an after-tax need turns into a pre-tax profit target, see How Much Should I Pay Myself?.

Common Questions

Is the Freedom Number the profit my business has to earn?
No. It's what the business has to provide to your household each month after tax. The business's profit has to be higher, because tax comes out first and the business usually keeps some for itself.

Do I have to enter my taxes again for my business?
No. The "Tax Profile" is shared. Blueprints and My Business read the same profile, and a change made in one place shows up in the others.

Can I change my answers later?
Yes. "Refine Your Numbers" on the Results page is there for exactly that.