How Much Do I Need to Save Each Month to Reach My Goal?
A savings goal feels much more achievable once you know the monthly number. This guide shows how that number is worked out.
What is the Savings Goal Calculator?
This calculator works backwards from your target amount to find a regular monthly saving. It uses the future value of a series of monthly payments, with interest compounded monthly, so each payment earns interest for the months that remain. If the rate is zero, the monthly amount is simply the goal divided by the number of months.
How to use it
- Enter the total amount you want to save.
- Enter the expected annual interest rate and the number of months you have.
- Press Calculate to see the monthly saving, your total contributions and the interest earned.
Worked example
To reach 12,000 in 12 months at 6% per year, the tool gives a monthly saving of 972.80, total contributions of 11,673.57 and interest earned of 326.43.
How do I work out a monthly savings amount for a goal?
Start with the target amount and the time you have, then allow for any interest your savings will earn. Interest means you need to contribute slightly less than the goal itself, because the interest makes up the rest. The longer you save, or the higher the rate, the smaller the monthly payment needs to be.
Frequently asked questions
What if my interest rate is zero?
Then you simply divide the goal by the number of months, because no interest helps you along the way. Any positive rate lowers the monthly amount you need.
Should I include money I have already saved?
This version starts from zero and finds the monthly saving for the full goal. If you already have savings, subtract them from the goal first and enter the remainder.