Savings Goal Calculator
Calculate the monthly amount you need to save to hit a financial target.
TL;DR — Savings Goal Calculator: A savings goal calculator works backwards from a target amount to the monthly contribution you need, accounting for compound interest earned on your savings along the way. Use it for emergency funds, down payments, vacation budgets, college funds and retirement milestones.
What is the Savings Goal Calculator?
A savings goal calculator works backwards from a target amount to the monthly contribution you need, accounting for compound interest earned on your savings along the way. Use it for emergency funds, down payments, vacation budgets, college funds and retirement milestones.
How to use the Savings Goal Calculator
- Enter your savings goal (target amount).
- Enter the time horizon in months or years.
- Enter the expected annual interest rate on your savings.
- Enter any starting balance.
- Read the required monthly contribution.
Formula
PMT = (FV − P × (1 + r)ⁿ) × r ÷ ((1 + r)ⁿ − 1)
PMT = required monthly contribution · FV = goal amount · P = starting balance · r = monthly rate (annual ÷ 12 ÷ 100) · n = number of months
Worked example
Goal: $20,000 in 3 years (36 months). Starting balance $0, expected return 4% per year. Required monthly contribution ≈ $523.
Frequently asked questions
How much should I save each month?
A common rule is the 50/30/20 budget: 50% needs, 30% wants, 20% savings. Use this calculator to convert a specific goal into a target monthly amount.
What return should I assume?
High-yield savings accounts pay 3–5% in many markets. Long-term diversified investing has averaged 7–10% nominally for US equities. Use a conservative estimate for short-term goals.
Does compounding matter for short goals?
Less than for long goals. For goals under 2 years, the monthly contribution dominates and compounding adds only a few percent.
Is this gross or net of inflation?
Nominal. To target a real goal (today's purchasing power), increase the goal amount by expected inflation or reduce the assumed return accordingly.
What if I increase my contribution later?
The calculator assumes a constant monthly contribution. Running it again after a raise and adjusting upward is the simplest approach.