Your projected financial outcome will appear here.
Understanding Your Financial Plan
This Free Financial Planning Calculator is designed to give you a clear, high-level projection of your financial future based on your current savings, income, expenses, and future goals. It helps you visualize how your savings can grow over time, considering both contributions from your income and potential investment returns.
How the Calculator Works
The calculator uses a step-by-step approach to project your financial growth over the specified number of years. Here's a breakdown of the logic:
Annual Savings Calculation: It first determines how much you are saving annually. This is based on your Desired Annual Savings Rate (%) applied to your Annual Income ($). If this calculated saving is less than your Annual Income ($) minus your Annual Expenses ($), it will use the larger of the two amounts (your actual disposable income or your desired savings).
Investment Growth: In each year, your current savings are increased by the calculated annual savings and then compounded by the Assumed Annual Investment Growth Rate (%).
Projection: This process is repeated for the specified Number of Years to Plan to estimate your total savings.
The Mathematical Formula (Simplified)
For each year (n) from 1 to the total number of years (N):
Savings_Start_of_Year_n is the total savings at the beginning of year 'n'.
Savings_End_of_Year_n is the total savings at the end of year 'n'.
The Current Savings ($) is used as Savings_Start_of_Year_1.
The Annual_Contribution is calculated once and used for subsequent years, ensuring you're contributing consistently based on your desired rate or available disposable income.
Use Cases
This calculator is useful for:
Goal Setting: Estimating how long it might take to reach a specific savings target (e.g., for a down payment, retirement, or emergency fund).
Budgeting: Understanding the impact of adjusting your income, expenses, or savings rate on your long-term financial health.
Investment Planning: Getting a sense of how different investment growth rates could affect your portfolio over time.
Financial Awareness: Providing a simple, accessible tool for individuals to engage with their financial planning.
Disclaimer: This calculator provides an estimate based on the inputs provided and assumed rates of return. It is a simplified model and does not account for taxes, inflation, unforeseen expenses, or fluctuations in market performance. For personalized financial advice, consult with a qualified financial advisor.
function calculateFinancialPlan() {
var currentSavings = parseFloat(document.getElementById("currentSavings").value);
var annualIncome = parseFloat(document.getElementById("annualIncome").value);
var annualExpenses = parseFloat(document.getElementById("annualExpenses").value);
var desiredSavingsRate = parseFloat(document.getElementById("desiredSavingsRate").value);
var investmentGrowthRate = parseFloat(document.getElementById("investmentGrowthRate").value);
var yearsToPlan = parseInt(document.getElementById("yearsToPlan").value);
var resultDiv = document.getElementById("result");
// Input validation
if (isNaN(currentSavings) || currentSavings < 0 ||
isNaN(annualIncome) || annualIncome < 0 ||
isNaN(annualExpenses) || annualExpenses < 0 ||
isNaN(desiredSavingsRate) || desiredSavingsRate 100 ||
isNaN(investmentGrowthRate) || investmentGrowthRate < 0 ||
isNaN(yearsToPlan) || yearsToPlan <= 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields. Savings rate must be between 0 and 100.";
return;
}
var totalSavings = currentSavings;
var annualContribution = 0;
var maxDisposableIncome = annualIncome – annualExpenses;
// Calculate the consistent annual contribution based on the higher of desired rate or actual disposable income
var calculatedDesiredContribution = annualIncome * (desiredSavingsRate / 100);
annualContribution = Math.max(calculatedDesiredContribution, maxDisposableIncome);
// Ensure annual contribution does not exceed annual income if expenses are high
annualContribution = Math.min(annualContribution, annualIncome);
// Ensure annual contribution is not negative
annualContribution = Math.max(annualContribution, 0);
var growthFactor = 1 + (investmentGrowthRate / 100);
for (var i = 0; i < yearsToPlan; i++) {
totalSavings = (totalSavings * growthFactor) + annualContribution;
}
// Format the result to two decimal places
var formattedTotalSavings = totalSavings.toLocaleString(undefined, {
minimumFractionDigits: 2,
maximumFractionDigits: 2
});
resultDiv.innerHTML = "Projected Savings after " + yearsToPlan + " years: $" + formattedTotalSavings;
}