Savings Goal Calculator
Enter a savings goal, what you have already saved and an interest rate to see how much to save each month to reach it in time — or switch modes to see how long it will take at a set monthly amount. To turn 1,000 into 10,000 in two years at 5% interest, save about 353 a month.
Updated
How to use the Savings Goal Calculator
- 1Choose “How much each month?” or “How long will it take?”.
- 2Enter the goal, what you already have and the interest rate (0 for cash).
- 3Enter the time you have, or the amount you can save each month.
- 4Read the result and the balance over time.
How it works
Interest is compounded monthly at the annual rate ÷ 12, and deposits are made at the end of each month. What you already have grows on its own; the monthly deposit covers the rest.
The monthly amount needed is the shortfall × r ÷ ((1 + r)ⁿ − 1), where the shortfall is the goal minus what your current savings will have grown to, r is the monthly rate and n the number of months. With no interest it is simply the shortfall ÷ n.
The time to reach a goal is found by adding a month at a time until the balance reaches the goal, so it is a whole number of months.
Tax on interest, changing rates and missed months are not included, so leave yourself a margin.
The formula
- r
- monthly rate: annual rate ÷ 12 ÷ 100
- n
- number of months
- current
- what you have already saved
Worked example
Reaching 10,000 in 2 years from 1,000, at 5% interest
- 1,000 grows to about 1,104.94 in 24 months
- Shortfall: 10,000 − 1,104.94 = 8,895.06
- Monthly: 8,895.06 × 0.004167 ÷ (1.004167²⁴ − 1) ≈ 353.18
Result: Save about 353.18 a month; you pay in 9,476.32 and interest adds the rest.
Tips and common mistakes
- Set up an automatic transfer on payday for the monthly amount.
- Round the monthly amount up to leave a margin for rate changes.
- Use a separate account for each goal so progress is easy to see.
- Keep an emergency fund separate from goals with a deadline.