Recurring Financial Goals Calculator

Goal-based Investing

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

 There are many resources available for goal-based investing at freefincal.

One-time financial goals may be planned with these goal planners

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!

Create a "from start to finish" financial plan with this free robo advisory software template

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9 thoughts on “Recurring Financial Goals Calculator”

  1. 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

    Reply

  2. 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?

    Reply

    1. 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.

      Reply

      1. 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)

        Reply

        1. 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.

          Reply

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