Money is an essential part of our daily lives. We earn it, borrow it, spend it, or try to grow it. There is not a day that goes by when money and finances are absent.
Since managing money is such a big part of our day-to-day activities, here is a list of financial calculators we should keep in mind. These calculators will educate us, make us more aware, help us make sound financial decisions, and, if we pay attention, prevent us from making big financial mistakes.
What’s the REAL cost?
Have you ever stopped and asked yourself: What’s the real cost of that item I’m buying? Every time you choose credit as the form of payment, you’ll pay a premium. I’m sure you know that. Too many of us, however, dismiss the real cost of an item as long as the monthly payment seems to fit our monthly budget.
Next time you’re about to purchase something with credit, use this simple real cost calculator in order to understand the final price of the item. As an example, a $10,000 loan taken out for 5 years at a 5% interest rate will add $1,322.74 to your final price. Are you ok paying additional $1300 for that item?
Debt payoff calculator
Do you have a clear idea of your debt payoff dates? Do you know the difference an additional $20, $50 or $100 could make to your debt payoff date or how much interest you could save by making those additional payments?
Here is an easy to use debt payoff calculator . Simply enter how much you owe, your interest rate and the monthly payment you plan on making and voila, you’ll get your payoff date as well as the amount of interest you’ll end up paying. You can use this calculator to adjust your monthly payment amount in order to see how that new amount will impact your payoff date as well as your interest.
Once you’re done adding all of your debts, print your list out and use it to keep yourself accountable for achieving your debt elimination goals!
How much do i need for retirement?
Retirement is something most of us will face, sooner or later. Regardless of our current age, we should at least be aware of how much money we’ll need in order to cover our financial needs during retirement.
This retirement calculator is a great first step to help you figure out your ball park figure and see if your current retirement saving strategy is on par with your final goal.
Knowing what amount of money you’ll need will help you adjust your current budget in order to make room for more long-term savings. As always, the sooner you start saving for retirement, the better, since compound interest will have more time to work in your favor!
How much home can I afford?
Many experts suggest you should not spend more than 30% of your gross monthly income on housing. We would take an even more conservative stance and suggest spending 25% or less of your gross monthly income on housing. A recent report shows that the number of Americans who are spending more than 30% of their income on housing is growing, which puts many families in a financially dangerous position.
Here is a calculator that helps you determine how much house you can afford. Keep in mind that many calculators factor in spending between 30%-36% of your gross monthly income on housing. So as you use them, bring your final “affordable amount” down to 25% of your gross monthly income.
Mortgage payoff calculator
Becoming completely debt-free, including your mortgage, should be a goal of every individual or family. Owing nothing creates incredible freedom and options, plus it reduces financial stress tremendously.
Consumer debt should be prioritized ahead of mortgage payoff, but once you’ve eliminated all of your consumer debt, your mortgage should be next in line. Here is a calculator that helps you understand how additional payments towards principal (whether made monthly or annually) will shave off time and interest from your mortgage payment. You’ll be amazed at the difference that even an additional $50 per month can make!
This calculator will also give you your new amortization schedule so you can proudly track your mortgage payoff goal!
We hope that these 5 essential calculators will help you make better financial decisions, ditch debt faster, and avoid overpaying for items! If you need more tangible, one-on-one help, with eliminating debt and accelerating your savings, connect with one of our Money4Life experts!
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