Proper financial planning confuses many people, which explains the increase in free online financial planning calculators. How accurate and useful are these tools, however? Find out whether you know enough about financial planning calculators by taking this quiz.
What is a financial planning calculator?
a program that gives you advice about your finances based on your goals and financial data
a program that determines how much it will cost you to use a financial planner
a program that calculates the difference between how much you will make by planning your own finances versus using a financial planner
What is a problem with a number of financial planning calculators?
They use secret financial predictions.
They are designed to increase the profits of financial planning professionals.
They do not take inflation rates into account.
What is a common problem with financial planning calculators that are soundly programmed and are clear about their sources of predictions?
They are prone to input errors.
They are very expensive.
The results change due to constant shifts in financial outlooks.
What might you learn about a credit card using a free online financial planning calculator?
whether a card with an annual fee could save you money overall
how your interest rate ranks against others
whether it makes sense for you to maintain your credit card debt instead of paying it off
What information can a free online financial planning calculator tell you about your cash savings?
how they will be affected by inflation
whether or not you have chosen the best savings instrument
what tax effects there would be if you liquidated your savings
What can a free online financial planning calculator tell you about borrowing for college?
how much you can afford to borrow
whether you have borrowed at the ideal interest rate
how much taking the student loan will increase your future earnings
What is a flaw of even the best financial planning calculators?
They are based on hypothetical conclusions.
They don't take the human elements into account.
They are not updated to reflect changing financial predictions.
What is an example of a hypothetical that a financial planning calculator might easily get wrong?
the financial goals of the user
What is the best use for a free online financial planning calculator?
as a starting point for your planning that you then check with a professional
as your main tool for planning your financial future
as a tool for checking the financial plan you are already using
If you don't consult a financial planning professional after using a free online financial planning calculator, what is the least you should do?
Compare the results from multiple financial planning calculators.
Increase whatever the calculator tells you to save by an extra 15%.
Input different data to see how different the result is, to learn whether the program is accurate.