Friday, July 15, 2016

Using Online Calculators to Strategise Your Financial Goals

If you are beginner when it comes to savings, strategising your money early is always a good idea, especially if you have a steady income source. Online calculators estimate your monthly or weekly distribution of money according to the plan you’ve chosen, and help you strategise accordingly.

Read on to find out how you can use these to regulate your finances.

How do I Calculate my Finances Online?


As a first step, take stock of your expenses and savings by listing down how much money you spend, and where it goes. Let’s say your monthly income is Rs.50,000, out of which you pay some amount towards your monthly house rent, some towards the EMI of your vehicle, and some towards loan repayments.

You are eventually left with the amount that you can use for personal purposes. 


Online calculators help you to determine the funds you will be allocating to these categories, and plan accordingly. You can estimate how much money you will need to have on hand before taking that Personal Loan, and how much time you would need to clear your loans.

Your bank website or third party websites provide these online calculators, where you input amounts for categories like retirement plans or home loans. You can then determine the interests applicable, and the returns you will receive on the amount you are investing.

This is one of the best ways to start planning your finances.



Why use Online Calculator?


You have to be realistic about your money when you strategise your finances. First, list all broad expenses that are already fixed—including rent, bills, EMIs and other necessary expenses. This will give you an idea as to how much money you spend every month. Then, you can start the allocation of money to long term plans like home loans, educational loans, and retirement and medical plans. 


An online calculator helps you understand how your finances will look after you invest in each of these plans. Suppose you are planning a loan of Rs.2 lakh for your vehicle, for a tenure of 1 year, according to your current financial state. You have to pay an interest of 8% on this loan, if you decide to take it up.

This handy tool will give you an estimate of the monthly payment you would need to divert to clear the loan amount in the given amount of time, i.e. one year. You can also make use of specialized personal loan EMI calculators that estimate an average EMI you would be paying on your vehicle in advance so you can plan your savings and investments accordingly.

Where do I Start?


First, find the best plan for your money. If you are looking to purchase a vehicle or a home for yourself, prioritise accordingly. Once you’ve listed down your options, select an online finance calculator that suits your needs.

For example, you may find different calculators at one your lender’s website - for mortgages, Home Loans, educational loans, retirement plans, and so on. 


How it works


Pick a suitable calculator, input the amount, the time you think it would require to clear off the loan, and the interest rate. Then you hit ‘calculate’; the calculator shows you how much you will be paying. It also tells you how many payments you’ll need to make until the loan is cleared.

Online calculators do an efficient job of sorting out your finances; you can focus on planning your finances better. 

Remember to manually take stock of your expenses, prioritise your needs, and set aside a certain amount as savings before you finally plan investments and loans. Then, use the online calculator to estimate your monthly expenditure. Using this information, choose the loan plan that provides better interest rates and returns that best serve you.

Used right, online calculators for finances are some of the best tools to strategise your finances in the long run. So go ahead and start using one today.

Author Bio: Arwind Sharma is a financial advisor with an experience of more than 7 years. He has worked for topmost financial firms in India and has been a visiting faculty at many reputed institutes in India. Currently based in Pune, Arwind Sharma is a name to reckon with when it comes to financial management for big brands. A post-graduate in business economics, he is an alumni of Princeton University, USA. During his free time, Arwind teaches children from marginalised sections of society and also work on his blog.


1 comment:

  1. Nice article on calculators.I was recently opting for a personal loan, as said in the article i have checked for personal loan emi calcualtor first before opting for a loan,which helped me to make decision.

    ReplyDelete

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