Savings Goal Calculator

How the calculation works

The calculator assumes you deposit the same amount at the end of every month and that interest is added monthly. Money you have already saved keeps growing too, so it reduces how much you need to add.

To find the monthly amount it uses the future value formula for regular deposits:

Monthly saving = (Goal − Savings × (1 + r)n) × r ÷ ((1 + r)n − 1)

Here r is the monthly rate (yearly rate ÷ 12 ÷ 100) and n is the number of months. With a 0% return it is simply the amount still needed divided by the number of months. In “Time to goal” mode the calculator adds your deposit month by month until the balance reaches the goal.

Choosing a realistic return

• Cash at home or a current account: use 0%.
• Savings or deposit account: use the rate your bank actually pays.
• Investments: returns can be higher over many years, but values rise and fall. For goals less than three to five years away, most people keep the money somewhere that cannot drop in value.

Plan for rising prices

If your goal is years away, prices will probably be higher by then. A car or a wedding that costs 10,000 today may cost noticeably more in five years. Add a margin to your goal, or use a return figure that is your interest rate minus expected inflation.

Ways to reach your goal faster

• Set up an automatic transfer on payday so the saving happens before you can spend it.
• Keep goal money in a separate account so it is not mixed with spending money.
• Put windfalls such as bonuses, gifts and tax refunds straight into the goal.
• Raise your monthly amount whenever your income goes up.