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A savings calculator is a tool that helps you estimate your monthly savings need to attain a specific financial goal. Our online savings calculator can help you plan your financial goals in just a few seconds.
You can also use the calculator to examine and compare different scenarios for investment. For example, if you can build a retirement corpus of Rs 1 crore in 10 years, with your current saving capacity. All you need is to determine your financial goal in money terms and use saving calculator to assess the scenarios best suited to achieve the goal.
This is the money you want to collect in the future, i.e., this is your financial goal
This is the amount you have already saved for the goal
This is how regularly you want to save money towards this goal. You can select any frequency from monthly to annual.
This is how much time you have for this goal. The amount you need to save every month or year will depend a lot on how much time you have at your disposal.
This is the return you expect on your invested money. To be safer you should select a conservative rate of return ranging between 6% to 8% p.a.
A savings calculator allows you to create a detailed savings plan to help you achieve your financial goals. It helps you assess your financial goals leading the way to goal accomplishment.
You can use a savings calculator to plan for any financial goal including retirement. So, with the calculator, you don’t need to start investing on a hunch. Instead, calculate the real numbers and achieve your goal with confidence.
The calculator helps you arrive at actionable numbers quickly, and you can start investing quickly. Meanwhile, you may try and get more comprehensive financial advice. But, the calculator enables you to save time and start early.
Planning makes your efforts more efficient and effective. The same goes for goal planning as well. If you invest with a plan, you are more likely to achieve your goal and hopefully with more money than you aimed for. Hence, take out sometime and research all the available financial instruments where you can invest your money, for example, savings plan.
If you have been saving for a goal for some time, you can use the calculator to assess your progress. The savings calculator can help you estimate whether your regular saving amount is adequate, too high or too low to achieve your goal within time.
The savings calculator also allows you to compare your options. If you want to achieve more than one financial goal, you will need to prioritise allocating your savings wisely. Comparing both investments will give you an idea of which goal you should get to first and which one later.
You need to determine your savings horizon or time to achieve the goal based on your life’s priorities. It is better to buy the best savings plan that guarantees regular income, which will help you plan your finances. You can classify the goal in the following three categories as per their importance:
Saving is an essential step towards the final financial goal of freedom from active earning. But is ‘retirement’ the only reason to save? Not really. Here are five reasons you should save:
Saving is the only way you improve your wealth status. Earnings are like a tap, when it is open you have water. If your bucket’s outflow is equal to the inflow from the tap, the bucket’s water level will remain stagnant.
Life gives you options to grow. However, without adequate preparation you are forced out of many larger life and financial goals. Save money out of your income in a saving scheme to take on the opportunities regardless of their size.
Emergencies do not generally send warnings or proposals before arrival. Few of them can be disastrous for your wealth. Saving small amounts towards insuring against such emergencies can save your finances from derailing due to them.
Who doesn’t want to live life on their terms? Most likely you do too. However, freedom requires sacrifices. Saving money while you can, is the small sacrifice you make towards such freedom.
And finally, you can hope to be free from the burden of doing something to earn more money. Take a break, relax and let your savings do the hard work for you.
Any saving plan where you can park your savings regularly and expect it to grow beyond inflation and taxes. Some of the best savings plans offer to grow your money tax-free. For example, Guaranteed Savings Plan, Invest 4G, liquid and debt mutual funds, NPS (Tier-II account), etc. are some of the best savings plans.
Guaranteed savings plan and Invest 4G give you the benefits of tax-saving on invested money and tax-free maturity value.
If you have a specific sum of money that you want to double, you can invest it in a plan which allows for a lump sum investment. However, you need to take care of the duration of the investment. For example, if the investment plan gives a rate of return of 8% p.a., you will need to stay invested for about 9 years.
If your risk appetite allows, and your only aim is to double your investment, you can look for more aggressive investments, such as equity stocks. Though, with such investments, you may not estimate the investment horizon as the returns are market-linked.
The ideal savings ratio for a 30-year-old should be above 35%. The savings ratio indicates the part of your income that you are investing in different medium and long-term goals. Your total savings ratio when including the emergency savings, and short-term goals may go up to 60% of your monthly income.
However, regardless of whether you can maintain this savings ratio, you should save at least 12% of your income towards your retirement.
If you are just beginning to invest, first thing is to choose investments that match your risk profile and liquidity needs. In any case, assuming that you have not invested anywhere before, you should start with super saver deposits and safe investments. These funds will be readily available to you and will form your emergency fund corpus. In the meantime, spend some time on getting a term life cover and health insurance. Also, think of your short and long term goals while you build your contingency funds.
Once your emergency funds are ready and you are adequately insured, start investing in your financial goals, using long term investments. For example, NPS, PPF, ULIP plans, etc.
If you are expecting good returns, then your investment risk appetite should allow for high-risk investments. For example, stocks and equity mutual funds and ULIPs. However, if you want slightly safer investment yet market-linked returns, you can invest in debt funds through mutual funds or ULIP plans.
Understand that good returns may require patience and time. Equity market returns may overtake other investments over a long period.
Both are purpose-built long-term investments. While both life insurance and PPF offer similar tax benefits, life insurance will also enhance your family’s financial safety. Thus, if you have a goal that requires an additional life insurance umbrella, life insurance will be a better choice. However, if you are investing in goals and already have adequate life cover, you can invest in PPF as well.
The saving account interest rate varies from 3.5% to 6% p.a. in India. Thus, Rs 1 lakh can fetch up to Rs 6000 in a year. If you deposit this amount every year, in five years your investment will garner anywhere between Rs. 55,000 to Rs. 97,500 in interest depending on the rate of interest of the account.
If you are saving this much money every month, you should divide and invest this amount as per your financial goals. Ideally, 50% of your savings should be dedicated to long-term goals. If you do not have a specific long-term goal, you can simply keep investing Rs. 10,000 in a tax-free long-term investment like a ULIP plan. The remaining 50% can go to short and medium-term goals.