The first three online calculators have helped wipe out your credit card debt, plan an early loan payoff, and buy a car within your budget
Once you’ve gotten that far (and maybe you’re there already), you’ll want to sharpen your savings plan.
This calculator, found at calculator.com, takes a real-world approach to savings. Like most serious savers, you will likely make an initial deposit and then contribute a set amount regularly. There are entry fields for that info, as well as the interest rate and number of years to meet your goal.
Once you enter the information and click Calculate, you will see your total investment, the amount of interest earned, and the final balance.
Being able to see how your savings plan will pay off is a great motivator to come up with a strategy and stick to it. But that’s only part of the beauty of this gem.
You will want to experiment with different values in most of these fields. Even if you know the initial deposit will be $1,000, you may want to consider making a larger or smaller monthly contribution. How will that impact your plan? Same goes for the length of time your plan will be in effect. What would happen if you put in $60 per month for 15 years? Or $150 a month for 20 years? Or $200 a month for 10 years?
By tinkering with the numbers, you will soon grasp the power of putting money aside for whichever goal you choose.
Another thing worth noting is the interest rate. In the example above, I entered 3.5% interest which is difficult or impossible to achieve in an FDIC-insured account today. However, because of the 10-year investment window and the strong likelihood interest rates will be higher then, 3.5 percent may be realistic.
As with all calculators, you can and should revisit them when something changes (e.g., your ability to contribute more or less, or a change in the interest rate). Take the actual amount in the savings account and enter it as the initial lump sum investment. Then fill in the other fields with the new figures and run the calculations. How will the change impact your savings plan?
Click here to access the calculator.com savings calculator.
