Savings Goal Calculator
Work out the monthly saving needed to reach a financial goal by a target date.
Written by Rahman · Last reviewed
Quick answer
Reaching a 50,000 goal in five years, starting from 5,000 at 6%, takes 619.98 a month: the 5,000 grows to 6,744 on its own, leaving 43,256 for the contributions to cover. Stretch the same goal to eight years and the monthly figure falls to 341.36. Extending the deadline lowers what you have to find each month far more than assuming a higher return does, and the deadline is the variable you actually control.
Results are estimates for general guidance and are not financial, tax or legal advice. Except where a calculator names a currency, figures carry no currency of their own: put in pounds and you get pounds back, put in rupees and you get rupees. Figures depend on the assumptions you enter and on rates that change over time. Check current rates and speak to a qualified adviser before acting on them.
About the Savings Goal Calculator
Whether you are saving for a home deposit, a car, education or an emergency fund, working backwards from the goal makes it achievable. Knowing the exact monthly amount required turns a vague intention into a concrete plan.
This calculator takes your target amount, any savings you already have, an expected rate of return and your time frame, then tells you how much to set aside each month to reach the goal.
Monthly = (Goal − Current × (1 + i)^n) × i / [(1 + i)^n − 1]
i is the monthly rate of return and n is the number of months to the goal.
The time horizon decides where the money should sit
A savings goal calculation asks for a rate of return, and the honest answer depends almost entirely on when the money is needed. The same portfolio that is sensible for a goal fifteen years away is unsuitable for one eighteen months away, because the range of possible outcomes is what changes with the horizon, not the average.
Money needed soon cannot afford variance. A house deposit required next year sitting in equities can be worth substantially less at exactly the moment it is needed, and there is no time to recover: the loss becomes permanent because the deadline forces the sale.
- Short horizons of a year or two point toward cash and cash-like accounts, where the return is modest but the balance is known.
- Long horizons can tolerate volatility, because there is time for a fall to recover before the money is required.
- A hard deadline and a soft one are different problems. A goal that can slip a year can take more risk than one that cannot.
The target moves while you save for it
A goal is entered here as a fixed number, but most real goals are attached to something whose price is not fixed. A house deposit is a percentage of a house price, a car fund buys a car, a wedding budget buys services, and all of those inflate while the saving is going on.
Over a long horizon this matters more than the return assumption. Saving toward a fixed nominal figure for ten years while the underlying cost rises means arriving with the amount you planned for and a shortfall against the thing you wanted.
- For goals tied to an asset price, revisit the target periodically rather than setting it once.
- Where the goal is a percentage of a purchase price, inflating the target at the expected price growth is more realistic than holding it flat.
- Tax on returns reduces what actually accumulates, so a sheltered account reaches the same goal with smaller contributions.
Frequently Asked Questions
How does my current balance affect the result?
⌄
Money you have already saved keeps growing until the target date, which reduces the new monthly amount you need to contribute.
What if I cannot save the required amount?
⌄
Extend the time frame, increase your expected return by adjusting your investment mix, or lower the goal. Even a longer timeline makes the monthly figure more manageable.
Should I assume a return at all?
⌄
For short goals, a low or zero return is safest. For longer goals, a modest investment return reduces the monthly amount needed, but adds market risk.
How often should I review the plan?
⌄
Revisit it at least once a year, or whenever your income, goal or timeline changes, and adjust the monthly amount accordingly.