How to use the Savings Goal Calculator
- Choose Monthly saving to find how much to put aside, or Time to goal to see how long it takes.
- Enter your goal and what you have saved so far.
- Add the yearly interest or return you expect; use 0 for cash.
- Enter the time frame, or your monthly saving, and read the result, deposits, interest and goal date.
Features
- Monthly saving needed to hit a target date
- Time to reach a goal from a fixed monthly saving
- Counts your current savings and the interest they earn
- Total deposits, interest earned and goal date
- Yearly progress chart
Two ways to plan a goal
Every savings goal has four parts: the target, what you already have, how much you save each month and how long you save for. Fix three and you can work out the fourth. This calculator answers the two most useful questions: how much must I save each month? and how long will it take?
The formulas
With a monthly rate i (the yearly rate ÷ 12 ÷ 100), current savings S and n months, deposits made at the end of each month must cover whatever your existing savings will not:
Monthly saving = (Goal − S × (1 + i)n) × i ÷ ((1 + i)n − 1)
With no interest it is simply (Goal − S) ÷ n. To find the time instead, the calculator solves the same equation for n and rounds up to whole months:
n = ln((Goal × i + Deposit) ÷ (S × i + Deposit)) ÷ ln(1 + i)
Worked example
You want 20,000 in three years, have 2,000 saved and expect 4% a year. Over 36 months your 2,000 grows to about 2,254, so your deposits must make up the rest. The monthly saving is about 464.77. You deposit about 16,732 in total and earn roughly 1,268 in interest along the way. Without any interest you would need 500 a month.
Common savings goals
| Goal | How people often size it |
|---|---|
| Emergency fund | 3 to 6 months of essential expenses |
| Home deposit | A share of the price, often 10% to 20%, plus closing costs |
| Car | The full price, or a large deposit to keep any loan small |
| Vacation or wedding | A fixed budget by a fixed date |
Tips for reaching the goal
- Automate it. Schedule a transfer for payday so the money moves before you can spend it.
- Match the account to the timeline. For goals a few years away, a high-yield savings account or term deposit keeps the money safe. Riskier investments suit longer horizons.
- Clear expensive debt first. Card debt at 20% or more costs far more than savings earn. See how fast you can clear it with the Credit Card Payoff Calculator.
- Allow for inflation. A goal five or more years away will likely cost more by then. Adjust the target with the Inflation Calculator.
- Review it. After a raise or a bonus, increase the deposit and recalculate the date.
The calculator assumes a steady interest rate compounded monthly and deposits at the end of each month. Results are estimates for information only and are not financial advice.
Frequently asked questions
How much should I save each month?
Enter your goal, current savings, interest rate and deadline, and the calculator shows the exact monthly amount. Without interest it is the remaining amount divided by the number of months.
How long will it take to reach my goal?
Switch to Time to goal and enter your monthly saving. The calculator finds the number of months, including interest, and the month you should reach the goal.
Does it include interest on what I have already saved?
Yes. Your current savings grow at the same rate as your deposits, which lowers the monthly amount you need.
What interest rate should I use?
Use the rate on the account where you will keep the money, or 0 for cash that earns nothing. Avoid optimistic investment returns for short-term goals.
What if my savings already cover the goal?
The calculator tells you that you have already reached it. Raise the goal to plan the next one.