Managing your finances can involve some math that you don’t always have the skill, time, or inclination to attempt.
Luckily, you live in the 21st century, at a time when you can find assistive tools on your phone. With just a few taps on your screen, you can rely on these financial calculators to crunch the numbers for you.
1. Budget;
Making a budget by hand can be tedious. For those on a tight timeline—or those who simply don’t like writing out expenses by hand—a budget calculator can help.
These calculators give you a chance to input your gross income and expenses, and they process your results. They show your spending breakdown according to popular categories and how much of your annual net income you spend each month.
Many popular budgeting apps have these calculators built in. A budgeting app takes these calculations one step further. Rather than inputting your expenses and income by hand, you can give an app permission to sync your bank and credit accounts to populate this data automatically.
Budgeting apps can help you track your monthly expenses, flagging areas of overspending. It can also help you balance your spending, ensuring you set aside enough in savings and retirement.
2. Minimum Payment;
Financial challenges can strike at any time. One second, you’re balancing your budget, and the next, you’re dealing with an unexpected visit to the vet after your cat swallows a rubber band. If your emergency savings fall short of your cat’s vet visit, you may have to put the remaining amount on a line of credit.
A line of credit can be a helpful backup when you face financial challenges. If you don’t have a line of credit already, you can find out what to do when you need money by heading online and checking out your local financial institutions.
Once you get a bill for your line of credit, you’ll notice you can make a minimum payment. This is usually a payment towards your principal and finance charges.
By paying it, you’ll keep your account open. However, the rest of your balance not paid by the minimum will carry over to the next billing statement. There, it will be subject to interest and fees.
A minimum payment calculator helps you understand your debt better. It shows you how much time you’ll spend and the interest you’ll accrue by relying solely on the minimum. You’ll also see how much money and time you’ll save by increasing your monthly payments on your line of credit.
3. Debt-to-Income Ratio;
Everyone has debt. Most people get a mortgage if they buy a home, vehicle financing if they buy a car, or a personal loan if they have emergency repairs to make.
However, some people have more debt than they should.
When you’re used to paying multiple debts, it’s not always easy to see just how much of your income is tied up with these payments. A debt-to-income (DTI) ratio calculator lays it out in black and white. It determines how much of your income your debt payments take up as a percentage.
Generally speaking, anything over 49% is a red flag. It doesn’t leave you with much money to spend, save, or deal with emergencies.
Bottom Line:
Managing your money is difficult enough. Why make it any harder than it has to be trying to crunch the numbers by yourself? Take advantage of these calculators to get a better grasp on your finances.
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