Why SIP calculator is an effective tool for SIP planning?

Failure to plan your finances is the doorway to mediocre living.


Keeping that quote in mind, it is imperative that an individual plans how to be financially stable and have the ability to sustain it with time. It takes careful planning, patience, sound financial advice, and informative backing for continuing a journey in investments. We all know that savings are important, be it from one’s salary, allowance or business profits. It has always been advised that we spend lesser than what we earn, to save money and use it for the future. But, savings are a stagnant source of money, it does not have the possibility to grow, whereas investment does. When you invest the same savings in a mutual fund or any other mode of investment, it has immense capacity to grow with time and reap benefits. This becomes like a cushion for future financial exigencies, that one can rely on.

Speaking of mutual fund investment, SIP cannot be far behind. Starting a SIP investment plan at an early stage is a wise decision one can make, to build a strong and stable corpus for the future. Here are some steps you can follow for making a good financial plan: –

Crafting a budget

The steppingstone to any strong financial plan is to list down one’s expenses, and income, categorizing them based on priorities and then understanding how much is saved.

Managing debts

This is imperative in order to increase your savings. Hence, it is always recommended to pay off your loans, and credit card bills, and avoid any big-ticket purchases till they are cleared.

Start investing

The most important step is to invest your savings in a reliable mode of investment. One of them, gaining popularity in the market, is a SIP investment plan.

Backed by the SIP calculator, it has become easier to invest in SIP and understand what results the process can yield in the near future. SIP or systematic investment plan is a method of making a customized investment in a chosen mutual fund scheme, over time. Based on risk capacity, tenure of investing, and financial standing, one can choose the kind of fund –equity, debt, open ended, special funds, or any other mutual funds. Here, the investor has the freedom to choose the fund, tenure, amount to be invested and understand what works best for them.

To get a clearer picture, a SIP return calculator can help. Let us take an example of a target SIP calculator today. Suppose you wish to accumulate a corpus of Rs 50 lakhs after 30 years of your work life, with Rs. 1 lakh as your current savings, expected inflation as 5%, and assumed return as 12% p.a., your monthly savings should ideally be Rs. 5,739. This is the amount one needs to invest in a SIP investment plan, from today, for reaching the desired corpus.

Similarly, in the case of a SIP calculator, it tells you how much corpus, on an estimate you can expect, after investing a certain amount periodically over time.

Investing in SIP is an easy, hassle-free, and transparent process, as discussed in this article. Further, to calculate SIP returns, it is easier due to online tools like the SIP calculator.

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