How Savings Calculator helps me manage my finances

I’m really not the best student when it comes to math or anything number-related. I get confused easily so I like using tools that make it easier for me to compute and calculate. Being a realist, I know that money is a necessity and in order to have money, I would need to work and put whatever I save to good use… or save it wisely. The pandemic has slowed down most of our income streams in the last couple of years. I’m glad I was able to save up for rainy days but money that doesn’t grow won’t last. Thus I’ve been actively trying to find better alternatives that can supplement my brick and mortar bank account.

Savings CalculatorSince the beginning of this year, I have been putting money in digital banks. The interest rate of 6% is pretty hard to pass up, especially considering that time deposit in traditional banks yield less than 1% these days. Savings Calculator helps me accurately forecast how much interest I can get in pesos for the period of time that I keep my money in the account. It even takes into consideration the inflation rate. What’s more, you can use Savings Calculator no matter where in the world you are and what currency you are using.

savings_calculator2Okay so let’s try calculating how much my money will grow with 6% interest in a digital bank. It’s easy with Savings Calculator because all I have to do is fill in the blanks.

Let’s say I put ₱500,000 in a time deposit with 6% interest rate per annum. I do not withdraw at any time. I take into consideration the Philippines’ inflation rate which was pegged at 8% last month and then the withholding tax for interest which is 20%. My ₱500,000 would have earned ₱174,425 in 5 years time… or ₱34,885 a year. That’s an additional ₱34,885 I have per year from money that’s just sitting in savings. Had I left it in a traditional bank with 1% interest rate per annum, the same ₱500,000 would have earned only ₱25,779.63 in 5 years. That’s a measly ₱2,148.30 a year. See the difference? It’s so much easier to forecast, plan, and manage your personal finances with Savings Calculator.

There are actually several digital banks that offer anywhere from 4.5% to 6% interest rate per annum here in the Philippines. To play it safe, you can actually elect to place only ₱500,000 per entity which is the maximum amount that the PDIC (Philippine Deposit Insurance Corporation) insures for every depositor in a particular bank. Most digital banks offer 4.5% interest rate and I’d still take that over the 1% interest rate in traditional banks. I’m teaching my children about these things as early as now so they can get a headstart in saving for their future.

Do give it a try at https://www.savingscalculator.org/. Aside from this tool, the website also features a Savings Goal Calculator, a CD Rate Calculator, an Education Planning Calculator, and a Retirement Planning Calculator. This is definitely one of the most useful sites I’ve come across.

Like this post? Subscribe to this blog by clicking HERE.

Let’s stay connected:

 

Related Posts

No Comments

Leave a Reply