I have some smashingly good news for you. The Internet has taken almost all the work out of boring, complicated financial numbers–so much so, in fact, that you can now handle your own fiscal projections for everything from mortgages to college costs.
You can do it in the flick of an eyelash. Just by using any of the scores of free calculators on the Internet.
You don’t need to know a blessed thing about mathematics, economics or the exotic world of personal finance. Simply turn on your PC, hook up to the Internet, type in a few numbers in the right boxes on the screen, click on a button and a calculator will give you key answers in a matter of seconds.
The trick is knowing who offers which calculators and how to find them. Here’s an example:
A husband and wife wanted to know how fast a $100,000, 30-year mortgage would be paid off, and how much money they’d save, if they a) added $50 a month to their payment, or b) put in an extra $100 per month.
An associate of mine, who is a math expert with an economics degree, used a hand-held Texas Instruments calculator to figure out the answer in just under three minutes. When I gave the same problem to an electronic calculator on Bloomberg’s Web site (www.bloomberg.com/cgi-bin/ilpc.cgi), it gave me the answer in 24 seconds.
The couple would save $30,517 by adding $50 more, or save $48,823 with $100 more. And they’d pay off their loan up to nine years faster with the latter strategy.
The big advantage of using on-line calculators is they enable you to work with a slew of instant “what-if” scenarios, to see which one best fits your budget, lifestyle and goals. Imagine the drudgery–or paying some expert a few hundred bucks–to do the same thing by hand.
Suppose you want to know how much you’ll save by refinancing your present mortgage, or are wondering what price house you can afford based on a specific monthly payment. In the first example, you’d simply plug in your old interest rate, original loan amount and term, the number of months remaining on the original loan, the new interest rate and the new loan amount and term.
Presto! The calculator shows you–to the penny–the remaining balance on your loan, how your monthly payment will change, how much you’ll save each month, and the difference between your old total interest cost and the new one. It could be tens of thousands of dollars.
Bottom line: You quickly see the net amount you’ll save if you decide to refinance, and you can change any part of the script to compare different scenarios. Mortgage Market Information Services Web site at www.interest.com/calculators.html will even show you how much you can deduct from your taxes for mortgage payments made year by year, if you use itemized deductions on your tax form.
Trying to decide between leasing or buying a car? Go to the calculator at www.obanet.com/shr-cgi-win/autoleas.exe enu3. It’ll even tell you the difference in average yearly cost.
If you’re agonizing over college expenses, author Mark Kantrowitz has created an array of calculators that will make your job easier by clicking onto www.finaid.org/finaid/calculators/finaid–calc.html. Kantrowitz helps you determine the yields needed on investments to achieve the return you’ll need over a specific number of years, and his sources on financial aid are excellent.
Some Internet sites offer several calculators covering different subjects, such as home, auto, retirement, college, etc. Others zero in on only one money topic, like savings. If you can’t find the calculator you need, go to a search engine such as Excite or Yahoo. Plug in keywords such as “mortgage calculator,” and go from there. Many sites will try to peddle you stocks, credit cards or home loans as they offer free use of their calculators, so it’s a good rule to visit more than one site and ignore the hype.
Internet calculators used to be few and far between, but now they’re basic tools used by just about every cyber-maven and Internet peddler in the business. You’ll learn as you use the calculators and tighten up your financial planning, because electronics can empower the average guy to become a Captain Billy Whiz Bang in making better decisions with his money.
You no longer have to lean only on the experts to know what’s best for your wallet. By roaming the Internet and punching up a few numbers, you can prove it to yourself without being a genius at math.
Give the calculators a try.
– Credit tip. Your credit card issuer may offer a new card with a lower annual percentage rate than yours. Check fees and details and if you still want the lower rate card ask the issuer. Be insistent.
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Robert K. Heady is the founding publisher of Bank Rate Monitor and is the co-author of the book “The Complete Idiot’s Guide to Managing Your Money.” You can write to him in care of this newspaper or send e-mail to jrnl8888@aol.com.
