Personal Finance

Make Smarter Money Decisions with These Free Calculators

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Let’s start with an obvious statement: the average American is terrible at managing money.

And here are the numbers to prove it – only 40% of Americans can cover an unexpected $1,000 expense1 and a whopping 75% of Americans do not know how much money they need for retirement2. Budgeting, saving, and retirement planning are among the most vital money management tasks, yet – so far – your average American is failing on all fronts.

But this post isn’t about the average American – it’s about you.

While you may have basic money management under control, less obvious money decisions might be holding you back from realizing your full financial potential.

At Axos Bank, we know the first step toward making smarter money decisions is thorough research. We created our free online financial calculators to support your research and help you make the best decisions about how to manage your money.

Below, we will describe these calculators in further detail and outline where they may fit in your decision-making process.

APY Calculator >>

Avoid High Opportunity Costs

In economic theory, opportunity cost is the potential value you lose when choosing an alternative option.

For example, if you accept a $10,000 freelance assignment instead of embarking on a family summer vacation, your opportunity cost would be missed quality time with family and the chance to relax from work. If, instead, you decide to join the family vacation, your opportunity cost would be $10,000.

Whether large or small, every single decision that you make has an opportunity cost.

Here’s why opportunity costs matter:

Every financial decision that you make also has an opportunity cost. However, if you fail to conduct thorough research, you may unwittingly miss out on potential gain from unknown options. This means that your failure to consider all options thoroughly can cause you to lose money.

Using our free APY Calculator can help you conduct your research by calculating the opportunity cost of your financial decisions.

Let’s walk through a common scenario:

A typical bank customer, Alex, has held the same checking account at a local bank for the past ten years. After listening to a financial podcast, he decides to get serious about saving more money.

Luckily, Alex already has a savings account – his bank gave him one automatically when he opened his checking account. So, every month, Alex places $500 into this savings account.

Can you guess what Alex did wrong here?

While it’s always a good idea to save money, as soon as Alex made a financial decision – namely, to boost his savings – he should have immediately asked himself, “What are my options?” In fact, whenever you make a financial decision, you should always ask:

  • What are my options?
  • Can I find something better elsewhere?
  • What is the opportunity cost of choosing Option A over Options B and C?

By conducting research and examining each financial option in depth, you will ensure that you are getting the best offer for your needs.

Whenever you make a financial decision, you should always ask, “What are my options?”

Now, let’s take a deeper look at Alex’s opportunity cost:

For simplicity, we’ll assume that Alex’s savings account earns 0.09% annual percentage yield (APY), which - at the time of this article's writing - is the national average rate for savings accounts3. We’ll compare this account to a digital bank, where their online savings account offers 1.30% APY.

Let’s see how Alex’s monthly $500 deposit stacks up over ten years.

To calculate the numbers, we’ll use our free APY calculator:

After 1 Year After 5 Years After 10 Years
Alex's Bank
$6,002.69 $30,067.56 $60,270.74
Digital Bank
$6,039.06 $30,995.89 $64,073.40

After ten years, Alex’s monthly $500 would amass to $64,073.40. Compare that to the $60,270.74 that he would earn from his current bank! Therefore, the opportunity cost of not researching and weighing his options is $3,802.66.

Auto Loan Calculator >>

Avoid High Borrowing Costs

Just as the APY Calculator can help you discover opportunity costs, our Auto Loan Calculator can help you understand borrowing costs. In a lending relationship, your borrowing cost is the interest rate. Essentially, your interest rate is a fee that you pay for the privilege of borrowing money.

It’s common practice to search for the best deal on interest rates when searching for a new loan or credit card. But how often do you reevaluate your loan after the ink has dried?

To avoid high borrowing costs, reevaluate existing loans on a regular basis.

If you’re like the typical American borrower, your answer is: not enough. In fact, American homeowners missed out on $5.4 billion by failing to refinance their home loans when interest rates dropped in 20104. Put succinctly, each American who failed to refinance lost a total of $11,500 over the life of their loan5.

To avoid high borrowing costs, you must reevaluate existing loans on a regular basis.

Here’s when you should consider refinancing an existing loan:

When Your Credit Score Improves. If your credit score and/or debt-to-income ratio (DTI) has improved since taking out your loan, a refinance can significantly reduce your borrowing costs.

When you apply for a loan, the lender uses your credit score and DTI to determine how likely you are to pay back the loan. For low credit scores and high DTIs, the lender will always increase interest rates to make up for the added risk. When you improve your credit score and DTI, you also improve your creditworthiness. Lenders will then decrease interest rates to entice you to borrow money at their institution.

To ensure you’re always getting the best deal possible, be sure to pay bills on time, reduce your debt, and remove inaccuracies from your credit report.

When Interest Rates Drop. When the Federal Reserve lowers interest rates, you have an opportunity to refinance your loan to reduce your borrowing costs.

Unlike credit scores, the Federal Reserve’s decision to raise and lower interest rates is completely outside your control. The Federal Reserve uses interest rates as a tool to stabilize the economy. When the economy isn’t doing well, the Federal Reserve lowers interest rates; when the economy is doing well, it raises rates to prevent inflation.

While these decisions are out of your control, you can always pay close attention to how the economy is faring and seize refinance opportunities as they arise.

When a Better Deal Is Available. Sometimes, borrowers simply do not get the best available deal. Perhaps a misinformed borrower used an auto dealer’s financing package instead of a direct loan from a bank. Or perhaps a borrower opted for a longer loan term (which usually incurs higher interest rates) and they’re willing to shorten the life of their loan.

In these instances, it’s always a good idea to reevaluate your options.

Use the following calculators to help you reexamine your existing loans:

Mortgage Calculator >>

Optimize Payments for Better Budgeting

Optimizing interest rates plays a large role in making smarter money decisions, but it’s not the only factor. Depending on your financial situation, you may find that your ability to make payments is your most important factor.

We designed our Mortgage Calculator to help you try different mortgage scenarios and determine a payment that fits best with your budget. By adjusting the amount, term, and rate of the loan, you can get an accurate idea of how much home you can truly afford.

Generally speaking, the longer the loan term, the higher the interest rate. Be sure to also keep fees in mind, as higher fees lead to a higher annual percentage rate (APR). For more information on how to optimize annual percentage rates, read our article, Why You Need to Know Interest Rates.

Better Research = Better Outcomes

By now, our hope is that you understand the need for thorough research when making financial decisions and reevaluating existing loan terms. Doing your homework will enable you to make smarter and better-informed decisions about your finances.

We welcome you to use our free calculators to further your research. For more information about how to optimize your money management, take a look at these related articles below.


  1. Nova, Annie, “A $1,000 emergency would push many Americans into debt”, CNBC, January 23, 2019,
  2. Backman, Maurie, “75% of Americans Underestimate Their Retirement Savings Needs”, The Motley Fool, July 10, 2017,
  3. “Weekly National Rates and Rate Caps – Weekly Update”,Federal Deposit Insurance Corporation, May 27, 2019,
  4. McBride, Jon, “Americans missed out on $5.4 billion by not refinancing, study says”, BYU News, February 28, 2017,
  5. Keys, Benjamin, “Failure to refinance”, Journal of Financial Economics, December 2016

Make Smarter Money Decisions with These Free Calculators

This blog post was published by Axos Bank on June 10, 2019 and last updated on June 10, 2019.

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