Contributor, Benzinga
November 24, 2021

A calculator was once a necessity in any math class above elementary school. But now that smartphones are ubiquitous, everyone has a ready-to-go calculator right in their pocket. Of course, it’s not a very sophisticated calculator, but you really don’t need those graphing functions now that high school calculus is a thing of the past.

However, you may find yourself requiring a calculator once again when it comes time to take out a mortgage, pay down credit card debt or save for retirement. Financial calculators, like the ones found on MoneyLion, enable millions of Americans to finely tune their financial picture through precise measurements of future gains or losses. These are quickly becoming crucial in a world where everyone wants their own “do-it-yourself” financial plan, but you’ll need to use them properly if you want the information they provide to have any concrete value.

What Is a Financial Calculator?

A financial calculator is a web-based tool that provides consumers with a way to calculate various rates of return using adjustable inputs. You enter your data into the appropriate spaces on the page and the calculator whips up your range of future outcomes. Financial calculators aren’t perfect in creating these projections, but they are a great resource for offering ballpark estimates of important financial decisions.

For example, let’s take a look at the House Affordability Calculator on MoneyLion’s website. Buying a home is one of the biggest financial decisions most people will make in their lives, and buying too much house can set your personal finances back by years. But home ownership is also an emotional decision. A house is a hunk of timber and aluminum, but a home is a place where memories and milestones are created. That’s why the House Affordability Calculator is so useful — it removes emotions and relays the facts.

When using the House Affordability Calculator, you enter your pertinent financial data such as gross monthly income, credit score range, current monthly debt obligations, funds available for a down payment and the zip code of the area you wish to live in.

The House Affordability Calculator is just one of the many tools consumers can use to project future financial data. Some of the other calculators on MoneyLion include the Life Insurance Calculator, where you enter data about your age, number of dependents and current financial assets vs liabilities to determine what type of life insurance policy to purchase and how much coverage you’ll need.

Who Needs a Financial Calculator?

An easier question to answer might be “who doesn’t need a financial calculator”? Unless you have an eidetic memory or a trust fund larger than the Grand Canyon, you’ll likely run into a scenario where a financial calculator can be useful. A few of those might include:

  • Building an Emergency Fund: Getting hit with unexpected expenses, such as medical debt or fines from a speeding ticket, rains on your life parade. MoneyLion’s Rainy Day Fund calculator helps build emergency savings by factoring income and expenses and producing a monthly savings rate.
  • Saving for Retirement: Few endeavors require calculating rates of return more than saving for retirement. Stock prices, economic conditions and geopolitical issues are all factors outside our control. But savings rate and risk tolerance are not. In fact, it’s a good idea to reassess your savings rate and risk tolerance every once and a while to make sure you’re still on track for your milestones. 
  • Shopping for Insurance: Ugh, insurance. What types of insurance policies should you purchase? And how much coverage do you need? Shopping for insurance can be a headache, especially since you’re buying something you hopefully never have to use. But some types of insurance are critical — health, auto, homeowners and life insurance are all must-haves, especially if you have a significant other or family that depends on your income. MoneyLion’s Life Insurance and Auto Insurance calculators help take some of the stress out of the insurance buying experience.

How Do Financial Calculators Affect Your Monthly Budget?

A financial calculator isn’t just for big expenses like retirement savings or home buying. Sometimes it’s nice to have a little help staying under budget at the grocery store, mall or when shopping online.


Monthly budgets tend to get stretched thin this time of year as holiday shopping commences. A financial calculator can help you stay on target by tallying up your available spending cash and applying it to various needs, like gift buying, decorations or food shopping. You don’t need added stress if you have family in town.

Are Financial Calculators Infallible?

No, of course not. Financial calculators aren’t omniscient wizards. They’re useful tools for financial decision-making. All that financial calculators provide is an estimate. For the information to be useful, you’ve got to enact it in your own financial plan. And the numbers provided by a financial calculator aren’t an exact future prediction, just a guess. Use the information appropriately, and understand the variables in play when making decisions.

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About MoneyLion

MoneyLion was founded in 2013 with the mission of helping less financially-savvy people meet their financial goals. MoneyLion spells everything out in plain English without financial jargon or technical language. And most importantly, clients won’t see their savings cut down with high fees and commissions. Whether banking, saving or investing, MoneyLion can provide a roadmap for your financial future.


Financial Calculators are Great Tools for Reducing Stress

As long as you understand their limitations, financial calculators are wonderful tools for performing quick back-of-the-napkin math. You won’t find a hidden path to riches or a secret sauce for building wealth, but you will understand more about what you must do personally to meet your financial goals. Financial calculators can provide a path out from high interest debt, a projection for retirement saving or an estimate on how much house you can reasonably afford. 

Frequently Asked Questions


What do financial calculators do?


Financial calculators are specific tools used for determining various financial data. These calculators are often web-based apps designed to perform financial functions such as calculating savings rates, determining mortgage affordability or figuring out how much insurance to buy. Calculators provide estimates based on various financial inputs provided by the user.


How do you calculate a monthly budget?


Calculating a monthly budget requires making a spreadsheet with assets and liabilities, much like the cash flow statement of a publicly-traded company. You’ll need to calculate all the sources of income you have like salary, investments, rental properties or side gigs and contrast it with outgoing funds for things like bills, expenses and leisure. Automate the areas of your budget that don’t change month to month like rent, electricity or cable bills, and set limits for the fluctuating parts of your budget like food, entertainment and travel. Creating a budget doesn’t mean becoming a miser with money — it’s about understanding what you’re bringing in each month and where your money actually goes when it’s spent.

About Dan Schmidt

Dan has written about a wide range of topics including stocks and investing, cryptocurrencies, banking, student loans, and credit cards.