How to use the Savings Goal Calculator
- 1 Enter your savings goal, such as a house deposit or an emergency fund.
- 2 Enter the amount you have already saved.
- 3 Enter the years until you need the money and the interest rate your savings earn.
- 4 Read the monthly amount to save, the total you will deposit and the interest earned.
Worked example
$20,000 goal in 3 years with $2,000 saved, at 4% a year. Your $2,000 grows to about $2,255 on its own. To cover the rest you need to save about $464.77 a month for 36 months, which is $16,731.72 of deposits, with roughly $1,268 coming from interest.
Features
Counts existing savings
Money you already have keeps earning interest, so you need to save less each month.
Interest included
Monthly compounding on every deposit gives a realistic, slightly lower monthly target.
Already there?
If your current savings will grow to the goal on their own, the calculator tells you.
When to use it
Emergency fund
Plan to build three to six months of expenses within a year or two.
Down payment
Work out the monthly saving for a 20% down payment in five years.
Holidays and big purchases
Spread the cost of a trip, a car or a wedding across the months you have.
College
Set a monthly target for tuition you will need in a few years.
Frequently asked questions
How is the monthly amount calculated?
It finds the monthly deposit that, with interest compounded monthly, plus your current savings grown at the same rate, adds up to the goal by the end date.
What interest rate should I use?
Use your savings account or CD rate for short goals. For goals many years away invested in funds, a cautious expected return is reasonable.
What if I cannot save that much?
Try a later date, a smaller goal or a higher-yield account, and see how the monthly figure changes.
Does it account for inflation?
No. For goals years away, raise the goal to allow for rising prices.
Is the interest taxed?
Interest in an ordinary savings account is taxable. Tax-advantaged accounts such as 529 plans or IRAs can help for some goals.
How big should an emergency fund be?
A common guideline is three to six months of essential expenses, such as rent, food, utilities and insurance. Enter that total as your goal and choose a realistic time to build it.
Should I save or pay off debt first?
Many people keep a small emergency cushion first, then pay off high-interest debt such as credit cards, because the interest saved is usually higher than what savings earn.
How can I make saving automatic?
Set up an automatic transfer on payday for the monthly amount this calculator gives you, so the money moves to savings before you can spend it.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated