Published by Programme B
There are several scenarios where “trusting your gut” is perfectly acceptable: your love life, your taste in movies, your parenting style, etc.
But personal finance isn’t one of them. Shrewd personal financing requires a methodical, mathematical and meticulous approach. Whether you’re applying for a mortgage, saving for a rainy day or determining your ideal life insurance coverage, you need to cross your proverbial t’s and dot your i’s.
In the past, we often relied on professionals alone for these calculations – if we relied on anything at all. But nowadays, financial calculators are accessible digital tools available to every Canadian, provided you know where to look. Together with professional advice, these illustrative tools can help empower Canadians to become more educated and proactive with finances.
Here are the three financial calculators every Canadian should know about.
Retirement Calculator
It can be challenging to think 20 or 30 years ahead, especially as you strive to balance your present finances. But there comes a time in most people’s lives when you need to step away from the professional rat race and prioritize rest and well-being. How do you manage these two opposing aims: current financial stability and future financial security?
A retirement calculator may not have all the answers, but it’s a useful tool toward reconciling these aims. With a retirement calculator, you enter your age, pre-tax income, present assets and projected retirement age (plus a few other pertinent details). Then, the calculator – making educated assumptions on inflation, salary hikes and investment returns – charts a course for the future. It tells you how much to save each month to meet your ultimate retirement goal.
Life Insurance Calculator
Life insurance is an eminently valuable bit of reassurance for most Canadians. It helps guarantee the financial well-being of their beneficiaries if they pass away. But too often, Canadians enter life insurance agreements that aren’t right for them; they overpay for a product foisted on them by a life insurance advisor who works on commission, or they fail to get enough coverage.
Hitting the sweet spot for life insurance coverage takes serious self-evaluation and trusted professional advice. But you can start your journey with an accurate, informative life insurance calculator in Canada. With a life insurance calculator, you list several details: age, relationship status, dependents, smoking habits, expenses, income, etc. And through some actuarial wizardry, the calculator provides an overview of recommendations.
You may choose to use that recommendation as actionable advice toward a policy, or reconvene with a licensed professional for further discussion. Whatever you do, choose a term life insurance provider in Canada that trims unnecessary expenses to deliver affordable policies.
Mortgage Calculator
For most Canadians, a mortgage represents their largest debt – by far. And yet, too often, Canadians enter mortgages in an overleveraged, overextended position that can precipitate significant financial disruptions down the line.
As you consider mortgaging or remortgaging a property, consult a mortgage calculator. Compared to the tools above, mortgage calculators have a relatively simple mathematical task to perform. They take your principal amount, amortization period and various interest rate scenarios to tell you what you can expect to pay monthly. You can cross-reference this with an affordability calculator (which takes your income and other expenses into account) to determine whether a mortgage is feasible. As usual, it’s best to use these tools in conjunction with a trusted professional advisor.
You can take charge of your financial future with these free, accessible tools. Learn more about how to save for retirement, choose the perfect term life insurance policy or enter the ideal mortgage by exploring the links above.