Savings Goal Calculator

Emily BatdorfBanking Reviewer and Writer

With a background in education and a fascination with finance, Emily Batdorf writes approachable content for consumers who want to deepen their understanding of personal finance topics. She loves writing about financial foundations—like opening the right bank accounts, building an emergency fund and tackling debt. Her work has been featured on sites including USA Today, MarketWatch, Credible and LendEDU.

Emily Batdorf

Emily BatdorfBanking Reviewer and Writer

Banking Reviewer and Writer

Elizabeth AldrichDeputy Editor, Banking

With eight years of experience as a financial journalist and editor and a degree in economics, Elizabeth Aldrich has worked on thousands of articles within the realm of banking, economics, credit cards, investing, loans, personal finance and travel. Her work has been featured in Business Insider, The Motley Fool, Bankrate, Investopedia, LendingTree, Student Loan Hero, ValuePenguin, USA Today, Credit Karma, NASDAQ, Yahoo! Finance and more.

Fact Checked

Elizabeth Aldrich

Elizabeth AldrichDeputy Editor, Banking

Deputy Editor, Banking

Fact Checked

Updated: Jun 27, 2023, 11:51am

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.

Saving for a major goal is no small feat. That’s why having the right knowledge and tools—like a savings goal calculator—can be so valuable.

Taking the time to plan for your savings goals increases the likelihood that you’ll achieve them. A savings goal calculator takes the guesswork out of this process, giving you a predictable plan to progress toward your goals.

How To Calculate Your Savings

Determining how to calculate your savings involves figuring out what you know and then solving for what you don’t know. Decide which of the following questions you’d like to answer.

How much money do I need to save each month to reach my goal by a specific date?
How much will I save by a specific date if I contribute a fixed amount each month?
How long will it take to reach my savings goal if I contribute a fixed amount each month?

These are examples of different ways to calculate your savings. And you can answer all of these questions using savings goal calculators.

Say you know your target savings goal, initial deposit, savings deadline and interest rate (if applicable). With this information, you can calculate how much you’ll need to contribute each month to reach your goal.

The first step in calculating your savings goal is to determine the following:

Initial deposit amount
Monthly contribution
Interest rate, if applicable
How much time you have to save
Savings goal target

Next, you’ll plug that information into a savings goal calculator.

Say you come up with the following:

Initial deposit amount: $100
Monthly contribution: Not sure
Interest rate, if applicable: 2%, compounded monthly
How much time you have to save: 10 months
Savings goal target: $1,000

You can plug these values into a savings goal calculator to determine the monthly contribution needed to hit your goal. In this case, you’d need to save $89.16 per month.

How To Set Savings Goals

First, make a list of your savings goals. This should include things you need and things you want. Most people have retirement savings goals as well.

Next, sort your savings goals into three categories: short-, medium- and long-term. For example, an upcoming vacation is a short-term goal, while retirement might be a long-term goal. Some goals will have specific deadlines, like paying the deposit for your child’s preschool. Others—like taking a vacation sometime next year—are more flexible.

You’ll also want to consider how much you need to save for each goal. Some goals, like paying off student loans, will have a specific target amount. Others, like saving for retirement, might be a little vague. It’s okay to make your best guess.

With this information, you can start to play around with savings goal calculators and make a plan to reach your goals.

What Is a Good Savings Goal?

It can be hard to know what a good savings goal is. Different goals require different amounts of money. They have different timelines and priority levels. But if you’re struggling to set savings goals, some benchmarks can help.

For example, the 50/30/20 rule states you should spend 50% of your income on needs, 30% on wants and 20% on savings and debt repayment. This rule won’t work for everyone, but it can help guide you toward a reasonable savings goal.

To get a better idea of what savings goals make sense for you, figure out how much you can save each month. Subtract your monthly expenses from your take-home pay. Then, you can divvy up what’s left between wants and savings goals.

You can save for whatever you want, but everyone should have funds set aside for emergencies and retirement.

Emergency Fund

The purpose of an emergency fund is to cover unexpected expenses that are difficult or impossible to plan for. Rather than going into debt to cover an emergency expense, you can dip into these funds. Experts recommend saving three to six months’ worth of basic living expenses in your emergency fund.

Retirement

Retirement is another savings goal everyone needs to plan for. But again, there’s no hard-and-fast rule for how much you should save. Many experts recommend saving 15% of your pre-tax income for retirement. Of course, not everyone can afford to do so at every stage of their career. But you should start saving for retirement as early as possible and increase your contributions as you earn more.

How To Reach Your Savings Goals

Once you’ve set your savings goals and used a savings goal calculator to create an action plan, it’s time to execute.

Start by automating your savings wherever you can. This could look like:

Signing up for your employer’s 401(k) plan
Setting up monthly automatic transfers from your checking account into your savings account
Setting up monthly automatic transfers from your checking account into your retirement account

The fewer steps you have to take every month to work toward your savings goals, the easier it will be to reach them.

Next, make sure you’re putting your savings in the right places. You probably shouldn’t keep savings in your zero-interest checking account unless you have an extremely short-term savings goal. But you wouldn’t want to put your house savings—which you plan to use in the next two years—into the stock market. In this case, a high-yield savings account might be best.

Finally, you should track your progress. You might reach some short-term goals quickly, but other goals—like retirement—require decades of focus. Keep yourself motivated by tracking your savings as it grows.

How Long To Reach Savings Goals

How long it takes you to reach your savings goals depends on the following:

Your initial deposit
Your monthly contribution
Your interest rate, if applicable
Your savings goal target

Obviously, the higher the target, the longer it’ll take to reach your savings goal. The higher the initial deposit, monthly contribution and interest rate, the quicker you’ll reach your goal.

The easiest way to determine how long it will take to reach a savings goal is to plug this information into a savings goal calculator. Doing so can help you determine how long it’ll take to reach your various savings goals based on your unique situation.

You may get off track with your monthly contributions, and that’s okay. You can always return to the savings goal calculator to develop a new plan if your situation changes.

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Bottom Line

A savings goal calculator is a useful tool that can help you create the plan you need to reach your savings goals. But first, you need to set your goals and gather all the information you can—like interest rates, deadlines and savings targets.