On Spending Money

An ever present concern is at what rate can one spend money if one currently has a given amount and one wishes to have a certain amount at some time in the future. Initially we view the problem in the deterministic sense with increasing expenditures and a yield on the remaining principal. The problem is then extended to recognize the fact that the future time may be a random variable as in the case of an estate at the time of death. The second extension includes "shocks" to the system such as large medical expenses. It is shown that the most important consideration to the budgeter is the difference between the inflation rate and the return rate (yield) on principal.