In this article, we describe a useful technique for calculating modes of practical optical waveguides having two-dimensional arbitrary transverse refractive index profile. The method uses a finite difference platform for evaluating Helmholtz's equation in scalar and semivectorial forms through a field evolution algorithm. The method is straightforward, easy to handle and does not involve any complex analysis or matrix formulation. We tested the accuracy of our analysis approach by applying it on a large number of realistic waveguide problems having known results or results available in the literature. The formulation has facilitated us to study the modal properties, viz., field distribution, birefringence, dispersion and mode effective area, of a variety of practical two-dimensional structures namely, planar structure, coupler, semiconductor optical waveguides, optical fibers and arbitrary profile microstructured fibers which are uniquely important in photonics and guided-wave devices. The algorithm will therefore be very useful in designing and studying any arbitrary-structure waveguides, and to explore new geometry and properties.