How to use the savings goal calculator
- List each goal with a name, a target amount, what you have saved so far and the months to go until you need the money.
- Enter the yearly interest rate you expect on savings. Use 0 to ignore interest.
- Optionally enter the total you can save each month. The tool then divides it among the goals in the order listed.
- Read the total to save each month, the amount for each goal and, if you entered a budget, how soon each goal is reached.
Formula
Monthly rate i = yearly rate / 12
Deposit = (target - saved x (1 + i)^n) x i / ((1 + i)^n - 1)
With a 0% rate: deposit = (target - saved) / n
Total per month = sum of all goal deposits
Deposits are made at the end of each month. Each deposit is rounded up to the next cent so the goal is met. A goal already at or above its target needs 0.
Worked example
Three goals at 4% interest: an emergency fund of $9,000 with $2,000 saved in 24 months, a vacation of $3,000 with $300 saved in 12 months, and a car down payment of $6,000 with $1,500 saved in 30 months.
They need $273.98, $219.91 and $137.88 a month, so $631.77 in total toward $18,000 of targets with $3,800 already saved. With no interest the amounts would be $291.67, $225.00 and $150.00.
If you can save only $500 a month, the first two goals get their full amounts ($273.98 and $219.91) and the car fund gets the remaining $6.11, which would take 21 years 5 months to reach. The shortfall is $131.77 a month.
Several goals, one budget
Most people save for more than one thing at a time, and the amounts add up faster than expected. Seeing the monthly total first tells you whether your plan fits your budget before you commit to deadlines. The savings calculator is the better choice when you have a single goal and want to compare time and deposit.
When the total is more than you can save, there are three ways out: lengthen the deadlines, lower the targets or save in priority order. The optional monthly amount shows the third option, funding goals in the order listed and reporting how long the lower-priority goals would then take.
Setting priorities
Put the goals you cannot skip first. A common order is an emergency fund, then goals with firm dates such as tuition or a down payment, then goals with flexible dates such as travel. The emergency fund calculator can help set the first target.
The order matters only when the money is limited. If your monthly amount covers everything, each goal simply gets what it needs.
Interest and where to keep the money
Interest helps most on long goals and hardly matters on short ones. The rate here is an example value applied to every goal, and real accounts differ and change over time. Money needed soon is usually kept in stable, accessible accounts. This tool does not recommend any account or product.
Assumptions and limits
- Deposits are made at the end of each month, and interest compounds monthly at the yearly rate divided by 12.
- One interest rate applies to every goal. The rate is an example value and stays constant.
- Taxes on interest, account fees, inflation in what a goal costs and deposits that change over time are not modeled.
- With a monthly amount entered, goals are funded in the order listed, each up to the amount it needs, until the money runs out.
- A goal that receives less than it needs is given the time it would then take, up to 100 years.
- This is an estimate for planning, not financial advice.
Frequently asked questions
How much should I save each month for a goal?
Divide what you still need by the months left, then adjust for interest. For a $3,000 goal with $300 saved and 12 months to go at 4% the answer is $219.91 a month. The tool does this for each goal and adds them.
Can I plan for more than one savings goal?
Yes, add a row for each goal, up to twelve. You get the monthly amount for each one, a total, and a share of the total so you can see which goal takes the most.
What if I cannot save enough for all my goals?
Enter the monthly amount you can save. The tool funds goals in the order listed and shows how long the underfunded ones would take, so you can reorder, extend a deadline or lower a target.
Does the order of my goals change the total?
No. The total needed does not depend on order. Order matters only for how a limited monthly amount is divided, because earlier goals are funded first.
Why does a goal show Done?
It means the amount saved so far is already at or above the target, so no further deposits are needed. Remove the row or raise the target if you want to keep saving for it.