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The values shown here are only for illustration.
The results are generated based on the information provided. It is not intended to be and must not alone be taken as the basis for an investment decision.

In a world where financial planning is essential for a secure future, the significance of saving cannot be overstated. No matter your financial goals — a down payment, a significant purchase, retirement, etc.- knowing how to save and manage your money prudently is critical. In times like these, a savings calculator might be a lifesaver for those who aren't good with money management.

To assist people in making better long-term decisions, the savings calculator India allows users to understand how their money may grow over time using their financial data. You can use a monthly savings calculator to accomplish your financial goals by understanding how much money you need to save every month or year. The ultimate sum is dependent on your savings rate. So, read on to understand more about this tool in the article below. 

Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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What is Savings Calculator?

What is Savings Calculator

A savings calculator is one digital tool that can assist customers in forecasting the increase of their savings over time. Initial investment, periodic payments, interest rates, and compounding periods are just a few of the factors that these calculators consider.

To use the monthly savings calculator, enter your needed sum, investment horizon, and return rate into the appropriate fields. The savings calculator will show you how much you need to save each month to achieve your goal.

How do Savings Calculators Work?

So, do you know how do savings calculators work? So, let’s illustrate the working of monthly savings calculator with the help of an example. Let’s assume you need a sum of Rs 10 lakh in ten years. An annualized rate of return of 8% has been assumed with respect to the investment, and you have not saved any money toward the financial objective at this time.

You may use the PMT Function in the savings calculator India, where you enter the rate = 8/100/12. (Convert to monthly rate).

The investment period must be computed in months: 10 * 12 = 120 months.

Indicate that Present Value = 0 and Future Value = Rs 10,000,000

The savings calculator calculates the monthly investment necessary to achieve the financial objective, which will be Rs 5,430.

How to Use Savings Calculator?

Do you know how to use the Savings Calculator? You must ascertain the future value of your financial goal before using the savings calculator India. You may use the monthly savings calculator to determine the long-term value of your current goals.

Make advantage of the Savings Calculator to effortlessly ascertain the monthly amount of money that must be saved to accomplish your financial goals.

  • Just drag the slider to the right to set a certain monetary goal.

  • You may now input the amount you have put toward the financial goal.

  • Your expected rate of return on investment must be entered using the slider.

  • Using the Savings Calculator, you can easily determine the amount you need to save and invest each month to achieve your goal.

Savings Calculator with Example

Consider the user input fields as given below:

  • Initial Investment: Rs. 1,00,000

  • Monthly Contribution Amount: Rs. 10,000

  • Rate of interest: 5%

  • Time in Years (t): 3 years

  • Compounding frequency(n): yearly =1

Output will be as follows: 

  • Total investments: Rs. 4,60,000

  • Total interest earned: Rs. 72,507.50

  • Total savings accumulated: Rs. 5,32,507.50

How to Create the Best Savings Plan?

Starting to save now will ensure you have enough money to achieve your long-term goals when you're older. Presented below is a comprehensive framework to adhere to while developing an ideal savings plan:

1

Set your Savings Goals

Finding specific and manageable savings goals is the first step in developing a successful savings plan. No matter what you're saving for a down payment, a vacation, or retirement, you can get there if you set goals and stay motivated. Give specifics like the amount of money you need to put aside and a target date for when you want to achieve your goals.

2

Record your Expenses

In order to save effectively, you must first be aware of your spending habits. You can get a decent idea of your spending habits from a month's expense records. Separate your expenses into fixed (such as rent and utilities) and variable (such as dining out and entertainment) categories to identify areas where you may make cuts and increase your savings.

3

Make a Budget

Having a clear image of how you are spending at hand, it is possible to draft a realistic budget that supports your vision for saving. Allocate money towards accommodation, food, and transport in that order. Pay additional attention to one-time expenses such as holidays, emergencies, and so on, which you should also consider in your budgeting process. 

4

Choose your Savings Strategy

Your optimal savings plan determines your goals, the level of risk you can handle, and time availability. You can create a separate account where you can deposit your monthly surplus and then have a plan in place to invest that surplus. You could choose to direct some towards debt clearance and some to grow your investments in equity, real estate or debt funds. Always consider your life stage, current financial situation and what your long-term goals are while choosing your savings strategy.

5

Use HDFC Life’s Savings Calculator

Use savings calculators such as HDFC Life to track your progress towards goals and try out different scenarios. To determine how much you can save in the long run, just write your income, expenses, savings goals, and investment returns into the handy online calculator. This is one of the most simple to use savings calculator India, which can help you make informed decisions and adjust your savings plan accordingly, allowing you to achieve your financial objectives.

How Much Money Should I Save Each Month?

When determining your monthly savings goal and how much to save each month, it is crucial to consider your income, expenditure, risk tolerance, and financial ambitions. Here is a general framework to assist you in setting a savings goal:

1

Establish Clear Goals

Make a list of all your financial goals, both short-term and long-term. A few typical examples are a savings account for emergencies, a down payment on a house, a child's college education, and retirement.

2

Calculate your Monthly Needs

Make a complete tally of all of your monthly expenses, including rent, utilities, groceries, gas, and any additional payments or outlays for loans. Subtracting your monthly expenses from your income will give you your disposable income.

3

Determine Your Savings Rate

You should aim to save a certain amount of money every month. Depending on your unique circumstances and goals, a financial counsellor recommends saving 30% to 40% of your income, although this amount might be more or lower.

Ways to Save Money

Saving money is the first step towards achieving financial stability and the financial goals that one has. Here are a few budget-friendly tips to help you learn what is the best way to save:

1

Draft the budget

Maintaining your income and expenses can give you a good idea of your financial status. A budget that covers necessities like housing, food, utilities, transportation, and any debt you may have should be your next step. Every paycheck needs to have a certain amount set aside for savings.

2

Cut Out Useless Expenditures

Examine your spending to identify areas where you may cut down. Reduce your spending on dining out, rein in your impulse buys, cancel unused subscriptions, and shop around for everyday items to save money.

3

Make the Most of Discounts & Promo Codes

Use sales, coupons, and loyalty programs to save money on household items, food, and other items. Before purchasing, search online, in newspapers, or on mobile apps for coupons.

Advantages of Using Savings Calculator

A savings calculator may help you attain your financial goals by allowing you to design a detailed savings plan. Some of the advantages of savings calculator include: 

1

Plan Your Investments

No matter your financial objectives, a savings calculator may be a valuable tool in getting you started. Consequently, you may use the calculator to avoid investing based on intuition. Alternatively, you may be sure of your success by adding precise numbers.

2

Get More Done in Less Time

The calculator makes getting down to tacks easy, so you can start investing now. While you wait, you can look into hiring a financial counsellor to help you with more than just investing. But the calculator might help you save time by giving you a head start.

3

Assess Your Progress

You may use the calculator to track your progress toward a long-term objective. Using the savings calculator, you may determine whether your current savings rate is excessive or inadequate enough to attain your goal within a realistic timeframe.

Summing Up

To save money for the future and achieve your goal, you may utilise an easy-to-use tool called a savings calculator. Thanks to its accurate data, this tool is efficient and reliable. This tool may greatly accelerate your progress toward your goals when combined with accurate data and thorough planning. 

FAQs about Savings Calculator

1 What is the formula for calculating savings?

Generally, the formula for calculating future savings balance involves using the concept of compound interest. It can be represented as Future Value = Present Value × (1 + Interest Rate)^Number of Periods.

2 How do I calculate my savings rate?

Your savings rate may be calculated by dividing your monthly income by the amount you save. Next, put the percentage on display. If you were to save Rs.500 per month from your Rs.3,000 paycheck, your savings rate would be (500 / 3000) * 100 = 16.67%.

3 What is a savings calculator, and how does it work?

People can estimate the growth of their savings with the use of a savings calculator. The calculator generates forecasts of future savings balances by entering the user's beginning investment, contribution frequency, interest rate, and time horizon.

4 Can I use a savings calculator for short-term and long-term savings goals?

When preparing for the future and the present, a savings calculator is a lifesaver. No matter your long-term objective—retirement, a down payment on a house, or a vacation—a savings calculator may show you how your money will increase.

5 Is my personal information secure when using a savings calculator?

Among the many trustworthy savings tools available, HDFC Life's Savings Calculator refrains from requesting personal information. Since the security of your personal information and privacy is of the highest concern, reputable financial institutions employ encryption and other security measures to secure user data.

6 Can a savings calculator help me track my savings progress over time?

Yes, the savings calculator will allow you to monitor your savings and adjust your savings plan as needed.

7 Why should I use the HDFC Life’s Savings Calculator?

The Savings Calculator from HDFC Life is user-friendly and can help you estimate your savings growth and explore different saving situations. 

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