One of the biggest myths surrounding personal finance is that in order to be good with money, you need to be good at maths. Whilst some understanding of numbers is important, there are many calculators on the world wide web that can help with tricky sums. Here I list some of my favourites.
Income Tax Calculator
Understand your estimated take home pay by calculating how much tax is likely to come out of your salary. Calculator available on the GOV.UK site – linked here.
- Enter how much money you’re paid hourly, weekly, monthly or yearly
- Select if you’re over the state pension age
- Enter your tax code (If you don’t know your tax code it doesn’t matter too much, it’ll just be a more accurate estimate if you do!)
- Let them know if you pay Scottish Income Tax
- Get the results
The information that comes back shows a variety of different things, including how much Income Tax and National Insurance you’re expected to pay each year. The results I find the most interesting are the monthly figures. Understanding how much tax I’m going to pay each month lets me calculate what my take home pay is going to be. Knowing this number is crucial for understanding how much money I have to allocate between rent, bills, food, savings and entertainment each month. If you’re striving for a pay rise it can also be really useful to crunch the numbers based on your new salary. Or, you can work backwards and use the tool to figure out how much money you need to be earning to pay all your bills, and put away your ideal savings amount!
Premium Bonds Probability Calculator
I’ve had money in NS&I premium bonds for the last five years, with bonds ranging from £1,000 to £13,000. I find that people’s experience of Premium Bonds can be wildly different; some people love it and regularly win money, whereas other people invest money for years without seeing a single return. Money Saving Expert has an incredible tool which calculates the probability of you winning money, based on how many bonds you buy. You can access the calculator here.
- Enter how many bonds you have (bonds is just another word for how much cash you’ve invested)
- Select your time frame, e.g. if you want to see how much money you’re likely to win over one year then enter 1
- Press calculate to reveal the results
The tool then calculates how probable it is that you’ll be one of the bond holders that wins some money. The tool can help assess whether the amount of money you have available to invest is worth your time. For example, if you have £5,000 in bonds the tool calculates that you’ll win £50 a year – based on interest rates at other banks you can then decide whether you’re likely to make more than this £50 in interest from another bank. It’s worth me mentioning here that Premium Bonds is just a lucky draw, and I’ve won more than the tool suggested I would.
If you’ve ever sold anything on eBay you’ll know that pricing your products can be the trickiest part. I’m the first to admit that there’s been times where I’ve sold something for a couple of pounds to discover once I’ve paid for postage and fees I’ve made the tiniest of profits! In comes the eBay Calculator, which can be accessed here.
- Enter how much you’re planning on selling the item for
- Add how much you’re charging for shipping costs
- If you’ve bought something specifically to sell it again, list this cost here
- Next add how much shipping will actually cost (many people charge the buyer more money than it actually costs to ship something)
- The next line you should be able to leave as it is (unless you’re a business seller on eBay!)
- Reveal the results
This calculator will then work out how much money will be taken by eBay and PayPal, leaving you with a profit number. I find this extremely useful when negotiating with buyers, as it’s a super quick way to understand how profitable the sale is.
Buying a house is something I’m very much planning on doing in the next year or so, and I’m very aware just how much learning I have to do around the subject. One thing I like to look at is this mortgage calculator on Money Advice Service.
- Enter the price of the property
- Enter how much deposit you are able to pay
- Decide how many years you’re likely to be repaying this mortgage
- Select what interest rate you’ll be paying this back
The calculator will then tell you how much your monthly repayments are going to be. For example if I wanted to buy a house for £350,000 with a £20,000 deposit to be repaid over 45 years on 3% interest, I’d need to pay a monthly fee of £1,100. If this monthly repayment was much higher than I could currently afford, I could then use the calculator to manipulate each of the figures until the monthly repayment was more realistic. Rightmove also has a handy mortgage calculator at the bottom of each of their house listings.
I’ve saved this one for last as I think it can be a little bit depressing! The demotivating calculator is a tool that should be used when you need a kick up the bum to stop spending. Access it using the link here.
- Think of one non-essential item that you’re trying to reduce your spending
- Tick the box which relates to how often you buy that product
- Add how much this non-essential item normally costs
- List what your annual income is
- Press the button which says “Demotivate me”
For this example I’ve chosen to add coffee into the Demotivator! The tool tells me that if I buy one coffee at £2.50 every working day, on the average UK salary of £29,000, I’d spend £625 A YEAR on coffee, which equates to 1.65 weeks of my yearly salary. Ouchh! Reviewing your spending in this way can be a little horrific, but I’m sure it’ll make you think twice before you next head to Costa!
So there are my five favourite online calculators (yep I realise how cool it is to have favourite calculators), I hope that they will come in handy at some point during your money saving journey!