Savings Goal Calculator

A savings goal calculator tells you how much to save per month to reach a target amount by a specific date, accounting for interest earned along the way.

The core formulas:

Monthly savings needed (no interest): Monthly amount = (Goal − Current savings) / Months remaining

Monthly savings with compound interest: M = FV × r / ((1 + r)ⁿ − 1)

Where:

• M = monthly payment needed
• FV = future value goal
• r = monthly interest rate (annual rate / 12)
• n = number of months

Worked examples:

Example 1, house deposit, no interest: Goal: $25,000 in 3 years (36 months), currently have $5,000. Monthly needed = ($25,000 − $5,000) / 36 = $555.56/month

Example 2, the same goal with 4% annual interest: Two things earn interest here, and it is easy to forget the first one. Your existing $5,000 grows on its own: $5,000 × (1.00333)³⁶ = $5,636. That leaves $19,364 to come from contributions, not the full $20,000.

M = 19,364 × 0.00333 / ((1.00333)³⁶ − 1) = $507.15/month

Interest saves $48.41 a month, or $1,742.73 over the three years.

Example 3, retirement savings: Target $500,000 in 30 years (360 months), current savings $20,000, 7% annual return compounded monthly. Existing $20,000 grows to $20,000 × (1.00583)³⁶⁰ = $162,332 Still needed from contributions: $500,000 − $162,332 = $337,668 Monthly needed = $276.79

That is the whole argument for starting early in one number. The same $500,000 target over 15 years instead of 30 needs roughly five times the monthly contribution, because the existing balance has half as long to work and the contributions do too.

Key insight: Starting earlier dramatically reduces monthly contributions needed. Waiting 10 years to start saving can require nearly double the monthly amount to reach the same goal, due to lost compound growth.