Skip to content
ChalkCalculator

Money

Savings Goal Calculator

What to put away each month to reach a goal by a date — or, if you already know what you can save, how long it will take.

Enter the goal and how long you have.

What do you want to work out?

What you have set aside already. Leave at zero if you are starting fresh.

The rate on the account, or an assumed investment return.

Adjust for inflation

Optional. Shows what the goal is worth in today’s money. It does not change the contribution — the goal you entered is the number being solved for.

Projection. Depends on the future. Useful for planning, never a promise.

How this calculator works

A savings goal has two moving parts: what you put in, and what that money earns while it sits there. This runs the standard future-value formula in whichever direction you need — solving for the contribution when you know the deadline, or for the deadline when you know the contribution. Both are exact algebra rather than trial and error.

Contributions are treated as arriving at the start of each period, which is how a standing transfer on payday actually behaves. That earns one extra period of growth compared with the end-of-period convention, and on a long goal the difference is real money.

The obvious way to work this out is to divide the shortfall by the number of months. That over-saves, because it ignores everything the money earns on the way. On a $30,000 goal in five years with $5,000 already saved, dividing gives $416.67 a month; the real answer at 4% is $359.22. The $57 gap is the growth doing part of the work.

The return you enter is an assumption, not a fact — which is why this is a projection rather than an estimate. A savings account rate is knowable a year ahead. An investment return is not.

The formula

Exactly what happens to your numbers, step by step.

  1. What the balance grows to

    FV = PV · (1 + i)ⁿ + PMT · ((1 + i)ⁿ − 1) ÷ i

    PV is what you start with, PMT each contribution, i the periodic rate, n the number of contributions.

  2. Solving for the contribution

    PMT = (goal − PV · (1 + i)ⁿ) ÷ (((1 + i)ⁿ − 1) ÷ i)

    The starting amount grows on its own; only the shortfall has to be saved.

  3. Solving for the time

    n = ln((goal · i + PMT) ÷ (PV · i + PMT)) ÷ ln(1 + i)

A worked example

A $30,000 house deposit in five years, with $5,000 already saved, at a 4% return.

What you enter

Goal
$30,000
Already saved
$5,000
Time
5 years
Annual return
4%

The working

The naive method
($30,000 − $5,000) ÷ 60 = $416.67
What the $5,000 grows into
$6,104.98
So the contributions must supply
$23,895.02
Required each month
$359.22
Of which you contribute
$21,552.94
And growth supplies
$3,447.06

$359.22 a month

Dividing the shortfall by sixty months over-saves by $57 a month, because it ignores everything the money earns on the way. Note also that at 3% inflation, $30,000 in five years buys what about $25,878 buys today — so a deposit target set from today’s house prices is already behind.

Assumptions

Every result here rests on these. Change your inputs and the result changes with them.

  • Contributions are made at the start of each period, in equal amounts, without interruption.
  • The return is constant and compounds at the same frequency as the contributions.
  • Growth is untaxed. In a taxable account, tax on interest or gains reduces the real return.
  • No fees are deducted.
  • The goal is a fixed amount in future dollars, unless you enter an inflation rate.

What this cannot tell you

  • A constant return is a modelling convenience, not a description of markets. Real returns arrive unevenly, and a bad year near the end of a short goal hurts far more than a bad year at the start.
  • It cannot tell you what return to expect. That is the input the whole answer swings on, and nobody knows it in advance.
  • Tax is not modelled. Interest in a savings account is generally taxable as income; a retirement account is not, and the difference over a long goal is substantial.
  • It assumes you never miss a contribution. Missing three months of a five-year goal is not recovered by adding them at the end, because the missed money also missed its growth.
  • The inflation figure adjusts the goal for display only. It does not change the contribution, because the goal you entered is the goal being solved for.

Questions people ask

How much should I save each month?

Enter the goal, what you have already, and your deadline, and the answer above is exact for the return you assume. As a sanity check, dividing the shortfall by the number of months always over-saves — the gap between that and the real figure is what growth contributes.

What return should I use?

For a goal under about three years, use the rate on the account the money will actually sit in — a savings account or a CD, where the rate is known. For longer goals in a diversified portfolio, people commonly model 5% to 7% before inflation, but that is a long-run average and not a promise. Anything above 12% is flagged here as an upper bound rather than a plan.

Should I save for a goal or pay off debt first?

Compare the rates. Money in a savings account at 4% while a credit card charges 22% loses you 18% a year on every dollar you hold back. The usual exception is a small emergency fund first, so an unexpected bill does not go straight back onto the card.

Does the calculator account for inflation?

It shows you what the goal is worth in today’s money if you enter an inflation rate, but it does not change the contribution. That is deliberate: the goal you typed is the number being solved for. If you want a target that holds its buying power, raise the goal itself.

Why do contributions at the start of the period matter?

Each one earns a full extra period of growth. On a five-year monthly goal it is worth a fraction of a percent; on a thirty-year one it compounds into real money. Paying yourself at the start of the month rather than whatever is left at the end is worth more than it looks.

Related calculators

Sources and review

This calculator uses standard arithmetic with no external rules or published rates, so there is nothing to cite beyond the formulas shown above.

Methodology version 1.0.0 · Last reviewed