Introduction
Investing involves playing with numbers. An essential element while investing is financial planning. You need to define goals and shepherd your investments accordingly. No matter at what stage of life you are at, you need to be financially prepared.
To benefit from financial planning, you must be aware of all your investments, savings and borrowing. Sometimes you might put off planning for your future because the calculations are complex and will take time. There are, however, several tools that will help you make financial decisions that will suit your requirements. One of which is a financial calculator. This calculator is used to make an informed and well-thought decision when you plan your finances.
Most Banks offer financial customers an online financial calculator. ICICI Direct offers customers a free online financial calculator. From calculating the future value of your investments to making simple interest calculations, these online financial calculators will help to speed up the financial planning process that might otherwise take a long time. These calculations using the calculator will also help you understand your current financial situation and let you know what you need to take care of.
How to use financial calculators for better financial planning?
- You can plan out the future value of your investments using an online financial calculator. You might be a parent with a newborn baby. Right now, your only expenses with your child will be minimal. But as time goes by, you will face expenses like education. Planning for your child’s education is essential. Assume you have ₹1,00,000 that you want to invest in for your child’s education. If you think your child would need ₹5,00,000 to join a college course, you can use an online financial calculator to know how much this ₹1,00,000 would be worth in 10 years, given a fixed rate of interest. If you can calculate the future value of this ₹1,00,000, you can invest it wisely so that your child’s education needs are covered. That is called calculating the future value of your investments. You can use an online financial calculator for better financial planning.
- You might be a salaried employee right now, and you might want to make sure that your savings will last you through the years of retirement. As you grow older, you must ensure that your retirement funds also cover your growing medical expenses. There is a mathematical formula to calculate this amount, but it might be complex and not give accurate results. To ensure that you save enough now so that your future is covered, online financial calculators also help you calculate your retirement fund. Once you find out this amount, it will ensure that you have better financial planning.
- One of the critical calculations that most people struggle with is the calculation of tax. During tax-paying season, most people get confused with tax deductions, salary slabs and new regimes. The tax-payer might not make the correct calculation and might end up paying lesser than what is due. To avoid these confusions, an online financial calculator will consider all your income, your investments, and your deductions to let you know the tax you need to pay.
- If you want to borrow or have borrowed money, one of the main causes of worry might be the amount of equated monthly instalments that you have to pay. You might not understand the interest rates offered by the lender and get confused by the terms and conditions. With the help of an online financial calculator, you can know for sure the equated monthly instalments that you have to pay if you borrow a certain sum of money at a certain rate for a certain period of time. This will help you plan out your finances so that you can make sure you never default on your payments.
Conclusion:
It is not enough just to use the online financial calculator to get answers, you also need to have the knowledge and expertise to use this information to make financial decisions that best suit your needs and requirements. The financial planning that you do now will help make your life comfortable. Bad financial planning can lead to a lot of confusion not just for you, but for all your loved ones.
Disclaimer – ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. – ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai – 400 025, India, Tel No : 022 – 6807 7100. AMFI Regn. No.: ARN-0845. PFRDA registration numbers: POP no -05092018. I-Sec acts as a Composite Corporate agent having registration number –CA0113.Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Please note, Mutual Fund, Corporate Fixed Deposits, Bonds, Alternate investment funds, Tax planning, Succession planning, NPS, IPO, Investment Advisory and Loans related services are not Exchange traded products and I-Sec is acting as a distributor to solicit these products. Please note, Insurance related services are not Exchange traded products and I-Sec is acting as a corporate agent to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.
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