Wrestling with a complicated money decision? Here are four handy financial calculators to simplify the process! All of them are simple to use and absolutely free.
4 Handy Financial Calculators
1 – Credit Card Repayment Calculator
I hope you know by now if you only make minimum payments on your credit card debt, it’s going to hang around forever! With average credit card interest rates hovering around 15%, it’s a smart move to pay extra, if not the full balance, every month.
This debt repayment calculator from Credit Karma makes it easy to see how your monthly payment is going to affect your payoff rate and interest cost.
Let’s say you have the current average amount of credit card debt, $6,200, at 14.5% interest rate. If you make monthly payments of $185, your card will be paid off in 44 months and you’ll pay $1,796 in interest. BUT if you pay just $100 extra ($285) each month, you’ll cut your repayment time to 26 months! Pretty awesome, right?
If you have a hard time staying motivated to pay extra on your credit cards, I advise you to fill your numbers into the calculator, take a screenshot, print it out, and hang it on your vision board or refrigerator. Seeing how much time and money you’re saving will keep you inspired to stick to your plan!
2 – College Money Report™ Calculator
Not everyone reading this post has a college-bound high schooler. BUT if you do, you absolutely need this calculator! I come across many parents who are financially under-prepared to send their kids to college. And most underestimate the true cost of secondary education.
By spending 5 minutes plugging in your financial data, you’ll get your free customized College Money Report™ which will tell you three things:
- How much colleges think you can afford?
- Do you will qualify for grants and/or scholarships?
- How much will you be expected to pay out of pocket?
It’s best to find out this information as soon as possible so your family is prepared for the cost of college! Don’t wait until your child is a junior or senior in high school.
3 – Mortgage Payoff Calculator
I utilize this calculator from Bankrate on a regular basis with my clients. It helps them to solve several different scenarios:
- How much time and interest will it save me if I pay $X every month towards principal, over and above my regular payment
- What is it truly costing me to finance my rental property?
- How much will I (or won’t I be saving) by refinancing my home or rental property?
Let’s look at the first one, using my own mortgage as an example. My original mortgage amount was for $140,000, because we put a nice down payment on our house. We’re 9 years into our 30-year mortgage, so we have 21 years left.
If my husband and I decide to buckle down and pay an extra $1,000 towards principal ever month, we will shorten our payback time by 14 ½ years and save $40,600 in interest! But what if we can only afford to pay $100 extra per month? We’d still chop 4 years off of our mortgage and save $11,684 in interest.
In truth, my hubby and I pay extra on our mortgage each and every month, so we’ll actually be mortgage-free within the next 12-36 months.
What’s the lesson here? Even a little bit extra towards the principal makes a BIG difference! Imagine having NO house payment! What would you do with the money instead?
4 – Compound Interest Rate Calculator
In the same way paying credit card interest robs you of your wealth, compound interest earned on your investments is the rocket booster to a rich life! When you make an investment, continue to contribute to it, and leave it alone, your interest earns interest. As times goes on, that interest multiplies like a pack of unsupervised bunnies!
Let’s say you inherited $10,000 and invest it at 8%. In addition, you decide to contribute $100 each and every month. If you leave the money alone and let compound interest do its magic over 20 years, your investment will grow to over $108,000 (even though you only contributed $34k)!
I love this calculator from Investor.gov because it lets you play around with the interest rate, compounding frequency, and monthly contribution to see how high your pile of money can grow!
Are there any other financial calculators you’ve found to be useful for managing your money? If so, drop me a comment and let me know!