Whether in school or in your home office, using a calculator not only makes finding the answer easier, but it usually increases your odds of getting the math right. When it comes to your finances, you definitely don't want to get the wrong answer. So, why not use one of these financial calculators the next time you're trying to make a choice about your money?
Should you rent or buy a home?
Traditional wisdom is that buying a home is always the smart choice. You're paying yourself in the form of equity as opposed to giving your money to a landlord. However, depending on your circumstances it might be wiser to rent your home for a while. This rent-versus-buy calculator will help you know which option is best for you.
How much house can you afford?
If you're looking to buy a home, a smart first step is understanding how much house you can afford, or how much of a monthly payment you can make each month. Why look at properties that are out of your budget? Besides that it's cruel to your sanity to look at homes for which you may not be able to qualify, it might tempt you to make an impulsive decision that will negatively impact your financial well-being in the long term. Zillow's affordability calculator will help you determine a good target price for your home.
How much will your monthly mortgage payment be?
Maybe you fell in love with a house before you figured out your budget. It happens. Now you're want to see if you can make the numbers work. You don't mind how much the house will cost in total as long as the monthly payment falls into a decent range. Use NerdWallet's mortgage calculator to determine your monthly mortgage payment. It will also show how that amount would change depending on the type of loan you decide to use.
Keep in mind that this is your monthly loan payment, not inclusive of additional costs such as taxes and home-owner association fees.
How much car can you afford?
Car salesmen are notorious for being clever because their goal is to sell you a vehicle, not get you the best deal, much less the best loan rate. Don't walk on the lot without knowing exactly what your budget is, and ideally with a pre-approval already in your back pocket. You should know your maximum cut-off for your total purchase price. Yes, those heated leather seats are just $500 more, and you know the kids will love the T.V.s on the back of every seat, but by the time all these little things combine with the interest, you could have purchased a whole other car.
You can use Edmunds car affordability calculator to show you what your budget should be based on your desired monthly payment. If you plan to include the tax, title, and transportation fees in the purchase price, include those numbers in your math so you know what kind of deal you want to get from the salesman.
When do you plan to retire?
Okay, retirement might not be as exciting as buying a new house or car because it's too far away to think about, but it is definitely a major financial decision. The sooner you start setting money aside, the better your long-term results will be. But you'll also want to consider at what age you hope to retire, which will also affect both how much time you have to save, and how much you'll need to cover your post-work years.
To determine how much you should be contributing each month, NerdWallet's retirement calculator that will answer both for you. If you don't like the results, they'll even help you take steps to better your situation. Visit it periodically and see how changes in the market, in your contributions, and in your earnings adjust the total savings and possibly even your retirement date between now and the big date.
How much of my payment is going to interest?
Not everyone knows this, but when you make a payment towards your loan or mortgage, not all of it goes towards paying off the item you purchased. In fact, if the loan is new, a majority of your payment is going towards interest. You can see exactly how much of your payment is going to both the principal and the interest on the debt using an Amortization Schedule.
If a long-held anxiety of boxes and spreadsheets make the grid unappealing, Ed Financial Services offers a loan repayment calculator that will show you exactly what your amortization amount is based on how far into your loan repayment you currently are. It will show how much raising your payments or making an extra payment will save you during the course of your loan.
How do you count compound interest?
Albert Einstein called compound interest the eighth wonder of the world. He even went as far as to say that people who understand it earn it, and those who don't, pay it. But most of us are really bad at imagining the impacts of compound interest over the long term.
To prove the point, which would you take? $10 million dollars or a penny that doubles every day for a month? (1 penny on day 1, 2 pennies on day 2, 4 pennies on day 3, and so on...) If you picked the penny, you'd be over $700,000 richer than if you took the $10 million.
Moneychamp offers a compound interest calculator to show you how this formula will impact a balance over a duration determined by a rate of your choosing. You may not always need this calculation, but it's better than counting pennies.
How much money am I taking home?
A salary might sound pretty good, but do you know how that translates to your bi-weekly take-home pay? First, you'll have to take out both federal and state taxes. Then, you'll take out social security, Medicare, and whatever other pre-tax contributions you select, like a 401k.
So, how much will you actually get to put in your pocket? ADP offers a range of salary calculators depending on how often you get paid to help you find your periodic paycheck calculator.
How much is your time worth?
The cost of toll roads can add up, and you might consider why you should pay a toll when you can save $1.50 just by taking a different road. But it's not just the six quarters – it's the value of the time you save. Do the math.
If the toll road would save you 15 minutes of travel, even at an hourly wage of $7.25, that quarter-hour of time would be worth $1.81. By not taking the toll road, you spend $1.81 worth of time making the cost of the toll road cheaper. You might also take a longer route and use more fuel.
You certainly want your money to work for you, and Clearer Thinking's calculations and ideas on finding your own value, too. In addition to finding the correct answer to these common financial math problems, you save valuable time using these helpful tools.