Last Updated on
Financial goals maybe arranged into three categories.
(a) Goals based on a one-time expense. Classic example is a marriage. You invest to create a corpus, which evaporates around the time of the wedding. Any event that is unlikely to occur again or occurs infrequently would fall in this category. For example, a child’s under-graduate and post-graduate education expenses, a business goal etc.
(b) Goals based on recurring expenses or any event that occurs with a well-established regularity. These could range from
- a holiday that you like to take every couple of years
- an expensive medical test that needs to be repeated often
- school/colleges fees
- insurance premium etc.
Among these, you may realise that
- there are goals that are subject to inflationary increase each year (holidays, medical tests)
- there are goals that are subject to inflation, but only change (often by a large amount) every few years. School or college fees is a good example of such goals.
- there are goals that do not depend on inflation, for example, term insurance premium.
Of course, there may be other factors that affect the expenses involved but those depend on circumstances and hence cannot be quantified.
(c) Retirement! In both the above categories, the corpus save is utilised in full when the need arises.
Retirement is a very different ball game. A retirement corpus must be capable of meeting the retiree’s expenses for each year in retirement. That is the expenses drawn from the corpus must match inflationary increase. In order to do this the corpus must also be invested suitably. You can learn more about this here: How retirement calculators work
Hate ads but would like to support the site? Subscribe to our ad-free newsletter and get beautifully formatted full articles delivered to your inbox!
There are many resources available for goal-based investing at freefincal.
One-time financial goals may be planned with these goal planners
- Another version of the goal planner is also available with this versatile SIP calculator
- Beginners may benefit from: A Step-By-Step Guide to Long Term Goal-Based Investing
- Advanced articles on goal-based investing are found here: Goal based Investing: 4-part series
- A variety of retirement calculators are listed here: Retirement calculators at freefincal
I would like to add a recurring financial goals calculator to this collection.
- You can use this for goals that repeat with any frequency: once a year, once in 2/3/4/5 … years.
- Two recurring goals can be calculated.
- The results are tabulated in a single cash flow chart.
Download the recurring financial goals calculator
Comments and suggestions for improvement, welcome.
Coming soon
- Integrated template for creating your own financial plan. This will combine all the three types of financial goals
- Automated mutual fund portfolio tracker
Stay tuned!
Do check out these related articles:
Hate ads but would like to support the site? Subscribe to our ad-free newsletter and get beautifully formatted full articles delivered to your inbox!
About the Author
M. Pattabiraman(PhD) is the author and owner of freefincal.com. He is an associate professor at the Indian Institute of Technology, Madras since Aug 2006. Follow @freefincal “Pattu” as he is popularly known, has co-authored two print-books, You can be rich too with goal based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management. He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice.
Pattu publishes unbiased, promotion-free research, analysis and holistic money management advice. Freefincal serves more than one million readers a year (2.5 million page views) with numbers based analysis on topical issues and has more than a 100 free calculators on different aspects of insurance and investment analysis.
He conducts free money management sessions for corporates and associations(see details below). Previous engagements include World Bank, RBI, BHEL, Asian Paints, TamilNadu Investors Association etc. Contact information: freefincal {at} Gmail {dot} com (sponsored posts or paid collaborations will not be entertained)Want to conduct a sales-free "basics of money management" session in your office?
I conduct free seminars to employees or societies. Only the very basics and getting-started steps are discussed (no scary math):For example: How to define financial goals, how to save tax with a clear goal in mind; How to use a credit card for maximum benefit; When to buy a house; How to start investing; where to invest; how to invest for and after retirement etc. depending on the audience. If you are interested, you can contact me: freefincal [at] Gmail [dot] com. I can do the talk via conferencing software, so there is no cost for your company. If you want me to travel, you need to cover my airfare (I live in Chennai)
Connect with us on social media
- Twitter @freefincal
- Subscribe to our Youtube Videos
- Posts feed via: Feedburner
Content Policy
Freefincal has original unbiased, conflict-of-interest-free, topical reports, reviews, commentary and analysis on all aspects of personal finance like mutual funds, stocks, insurance etc. All guest authors and contributors to the site also do not have any conflict of interest. If you find the content useful, please consider supporting us by (1) sharing our articles and (2) disabling ad-blockers for our site if you are using one. No promotional content. We do not accept sponsored posts and link exchange requests from content writers and agencies. This is our privacy policy Our website is non-profit in nature. The revenue from the advertisement will only be used for hosting charges, domain registration charges, specific plugins necessary for traffic growth and analytics services for search engine optimisation.Do check out my books
You Can Be Rich Too with Goal-Based Investing
My first book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. It is also available in Kindle format.Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
My second book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a young earnerThe ultimate guide to travel by Pranav Surya
This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for ₹199 (instant download)Free Apps for your Android Phone
All calculators from our book, “You can be Rich Too” are now available on Google Play!Install Financial Freedom App! (Google Play Store)
Install Freefincal Retirement Planner App! (Google Play Store)
Find out if you have enough to say "FU" to your employer (Google Play Store)
Looking forward to integrated financial planner and hopefully tracker also. Something like we start with a plan and a provision to update on half yearly or yearly basis where it stands.
Vijay
Hi Vijay, That is what I have in mind too. Let us see how it goes.
Hi,
This is a really nice calculator. One doubt, was the assumption that we will save only as much as is required till the next occurence of the goal a deliberate one? What I mean is, suppose I say that I don’t want to increase my savings every year and would want a constant cash outflow can the calculator be modified so that every time the goal approaches a certain sum is withdrawn and the remaining grows ? Or would any other calculator of yours serve this purpose?
Thanks. If don’t want to increase your savings each year, just set the annual increase in investment to zero.
The investment needed will still increase due to inflation.
What you are asking is,
I have lumpsum, I invest and take out when the goal arrives. The rest grows.
If so, what is lumpsum needed?
This is indeed possible.
In the annuity calculator here
http://freefincal.com/income-ladder-calculator/
use the corpus needed option. Of course this is possible only for yearly requirements.
For other frequencies, I will have to put something together. Not very difficult.
Let me know if you need one.
Well, what I was asking was one step further. i.e if I say annual increase in investment is 0, then the calculator should built in the inflation and then arrive at an EMI sort of number, which I can invest every month. In the initial years, after I take out money for the goal, there will be a surplus which will grow and at the end all corpus is fully used up. Or if I say, annually I can increase by 5%, then after inflation etc is accounted for, the calculator should throw up an amount which increases at 5% per year and still satisfies all goal instances comfortably. Is it too complicated? (The thought process was – my ability to save may not be proportional to inflation)
The easiest way would be to invert the calculation so that it depends on the amount invested. Trouble then is for some years there may not be enough for a goal.
Thalaiva… Any calculator for purchase of Electronic goods such as TV,Refrigerator etc ?
EMI calculator!!
EMI calculator!!