Savings goal

How this calculator works

The calculator adds your monthly contribution and compounds growth monthly at the annual return you enter until the balance reaches your goal. It also works backward to find the monthly amount needed to hit the goal within your timeframe. For goals under about three years, a high-yield savings account or CDs are common choices, so a modest return of 3% to 5% is a realistic assumption.

A worked example

The example is a $25,000 goal with $5,000 already saved, $500 added each month, and a 4% annual return. The balance reaches the goal in 3 years and 1 month. Along the way you contribute $18,500 and earn about $1,810 in growth.

The timeframe box asks the question the other way around. To reach $25,000 in exactly 3 years, you would need about $507 a month, only $7 more than you are saving now. Raising the contribution to $700 a month cuts the wait to 2 years and 3 months.

How to read your results

The headline is how long your current pace takes. The first row is the monthly amount that would hit the goal inside your target timeframe. If that number is higher than what you save now, you have three choices: save more, wait longer, or lower the goal.

The last two rows split the finished balance into your own contributions and the growth. For goals a few years away, contributions are nearly all of it. That is normal, and it means the return you assume matters less than it seems.

Common mistakes to avoid

• Assuming stock-market returns for a short goal. Money you need within about three years is usually kept in savings accounts or CDs, where 3% to 5% is a realistic range. Stocks can fall sharply over short periods.
• Forgetting that prices rise. A house down payment or a car will likely cost more in three years than it does today. Consider setting the goal a little higher.
• Saving what is left at the end of the month. An automatic transfer on payday is far more reliable than good intentions.