Savings Goal Calculator
Turn a target amount and a deadline into a monthly savings figure, with interest and your existing savings taken into account.
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A goal without a monthly number tends to stay a wish. Whether you are building an emergency fund, a house deposit or money for a car, the useful question is how much you need to put aside each month to get there on time. This calculator answers it, counting what you have already saved and the interest your account pays along the way.
How to use the savings goal calculator
- Enter your savings goal, the total you want to have.
- Enter what you have already saved towards it.
- Enter the time you have, in years. Half years work too, such as 1.5 for 18 months.
- Enter the interest rate your savings account pays per year. Use 0 for cash.
The calculator shows the amount to save each month, the total of your deposits, the interest you will earn and, for comparison, the monthly amount you would need with no interest at all.
The formula
The calculator compounds interest monthly and assumes you deposit at the end of each month. Your balance after n months is:
Balance = S × (1 + r)^n + D × ((1 + r)^n − 1) ÷ rwhere S is what you have already saved, D is the monthly deposit and r is the yearly rate ÷ 12. Setting the balance equal to your goal G and solving for D gives:
D = (G − S × (1 + r)^n) × r ÷ ((1 + r)^n − 1)With a 0% rate this simplifies to D = (G − S) ÷ n.
Worked example
You want $20,000 for a house deposit in 3 years. You already have $2,000 in a savings account paying 4.5% a year.
- r = 0.045 ÷ 12 = 0.00375, n = 36
- (1 + r)^36 ≈ 1.14425, so your existing $2,000 grows to about $2,288.50 by itself
- D = (20,000 − 2,288.50) × 0.00375 ÷ 0.14425 ≈ $460.44 a month
- Total deposits = 460.44 × 36 ≈ $16,576.01
- Interest earned = 20,000 − 2,000 − 16,576.01 = $1,423.99
Without interest you would need (20,000 − 2,000) ÷ 36 = $500.00 a month. Interest saves you about $40 a month, or $1,424 over the three years.
How the deadline changes the monthly amount
The same $20,000 goal, starting from $2,000 at 4.5%:
| Time to goal | Save each month |
|---|---|
| 2 years | $710.66 |
| 3 years | $460.44 |
| 5 years | $260.57 |
Giving yourself two more years cuts the monthly amount by about 43%. If the monthly figure looks impossible, moving the date is often more realistic than squeezing the budget.
Tips for hitting your goal
- Automate it. Set up a standing transfer for the day after payday, so the money moves before you can spend it.
- Round up. Saving $475 instead of $460.44 gives you a buffer for a month when you can’t save, or a rate cut.
- Separate your goals. A dedicated account for each goal makes it obvious how far along you are and stops one goal quietly funding another.
- Recalculate every few months. Rates change and life happens. Re-enter your current balance and the time left to get an updated figure.
- Account for rising prices. If the goal is a purchase, its price may go up. Use our inflation calculator to estimate what it will cost by your deadline.
Common mistakes
- Using an optimistic rate. A promotional rate that drops after six months will leave you short. Use the rate you can count on.
- Forgetting tax on interest. In many countries interest is taxable above an allowance, which slightly reduces what you keep.
- Counting the emergency fund twice. Money set aside for emergencies shouldn’t also be counted towards a holiday or a car.
- Ignoring the deposit timing. The calculator assumes end-of-month deposits. If you save at the start of each month, you will reach the goal slightly sooner.
Frequently asked questions
How does interest change how much I need to save?
Interest does part of the work for you, so your monthly deposits can be smaller. Saving $18,000 more over 3 years takes $500 a month in cash, but $460.44 a month at 4.5% interest. The longer the timeline and the higher the rate, the bigger the difference.
What interest rate should I enter?
Use the rate your account pays now, ideally a little lower to be safe. High-yield savings rates change with central bank rates, so a rate you see today may not last the whole period. Enter 0 if you keep the money in cash or a current account.
Does the calculator assume I save at the start or end of each month?
At the end of each month, which is the usual convention. Saving at the start of each month would earn one extra month of interest on every deposit, so the true amount needed is slightly lower.
Should I invest the money instead of saving it?
For goals less than about five years away, most people keep the money in savings, because investments can fall just before you need the cash. For longer goals, investing may grow faster, but the return is not guaranteed.
What if my goal is already covered?
If what you have already saved will grow to the goal by itself, the calculator shows $0.00 a month. You can shorten the timeline or raise the goal to see what extra saving would buy you.