# Savings Goal Calculator

> How much to put aside each month to reach a target by a date, given what you have already and the return you expect. The same annuity formula as compound interest, solved for the one number that is a decision rather than a forecast.

Use it: https://tessalor.com/en/money/savings-goal

This tool runs entirely in the browser. Nothing entered into it is uploaded.

## Formula

```
The future value of a starting sum plus a level
monthly payment, over n months at monthly rate i:

  FV = P x (1+i)^n  +  M x ((1+i)^n - 1) / i

Solved for the payment:

  M = (FV - P x (1+i)^n) x i / ((1+i)^n - 1)

At a rate of zero the annuity factor has the
limit n, so that branch is simply:

  M = (FV - P) / n

i = annual rate / 100 / 12
n = years x 12

Contributions land at the end of each month:
an ordinary annuity.
```

## Assumptions

- Contributions are paid at the end of each month, which is what a standing order set up after payday actually does. Paying at the start earns one extra month of growth on every contribution and lowers the required amount slightly.
- The return is constant and compounds monthly. Real returns are not constant, and a fixed deadline is exactly where that matters — a fall in the final year cannot be waited out.
- The rate is nominal and before inflation, tax and charges. A target set in today's money will buy less than you think by the time you reach it, which is the inflation tool's question.
- If the starting sum alone passes the target, the required contribution is clamped to zero rather than reported as a negative. The algebra's negative answer is the amount you could withdraw, which is a different question.
- The monthly figure is rounded to money before it is paid, as a standing order would be, so the final balance lands within a cent of the target rather than exactly on it.
- The figures carry no currency symbol on purpose. The arithmetic is the same in pounds, euros or dollars, and the tool follows whichever currency your locale uses.

## Inputs

| Name | Label | Type | Default | Range |
| --- | --- | --- | --- | --- |
| `target` | Target | currency | 20000 | 0 to 1000000000 |
| `initial` | Already saved | currency | 1000 | 0 to 1000000000 |
| `rate` | Return | percent | 4 | 0 to 100 |
| `years` | Years | integer | 5 | 1 to 60 |

## Outputs

- `monthlyRequired` — Save each month (currency), primary
- `totalContributed` — Paid in altogether (currency)
- `interestEarned` — Interest does (currency)
- `finalBalance` — Final balance (currency)

## Questions

### How much do I need to save each month?

For 20,000 in five years, starting from 1,000 already saved and assuming a 4% return, it is 283.25 a month. Of the 20,000, about 2,005 comes from the return and the rest is yours. That ratio is the useful part — over five years the contributions do nearly all the work and the rate barely matters, which is the opposite of a thirty-year picture.

### Why does halving the time more than double the amount?

Because you lose twice over. There are half as many payments, and each one compounds for half as long. The two effects multiply rather than add, so the monthly figure always rises faster than the time falls. Adding time is the most effective lever available and it is usually the least painful one.

### Does what I already have really help that much?

More than its size suggests, because it compounds for the entire period while each new contribution compounds only for what is left. In the worked example, 1,000 already saved removes about 18 a month from the requirement — more than the 16.67 a month it would represent if it were just divided across the term.

### What return should I assume?

For anything within about five years, a cash savings rate, because a fall at the wrong moment cannot be waited out on a fixed deadline. Longer horizons can justify more, but the figure should be cautious: this tool computes exactly what you ask of it, and an optimistic rate produces a comfortable monthly amount and a shortfall at the end.

### What if I cannot afford the answer?

Three levers, and they are not equal. Adding time helps most, because it adds payments and growth together. Lowering the target helps roughly proportionally. Raising the assumed return helps least over short periods, and it is the only one of the three that is a guess rather than a decision you control.

## Sources

- [Principles of Finance, section 8.2: Annuities](https://openstax.org/books/principles-finance/pages/8-2-annuities) — OpenStax, Rice University, applies to the future value of an ordinary annuity, and the end-of-period convention. Retrieved 2026-07-31.
- [Compound Interest Calculator](https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator) — Investor.gov, U.S. Securities and Exchange Commission, applies to the regulator's own calculator, used to check the forward direction of this one. Retrieved 2026-07-31.

## Variants

- [How much do I need to save each month for a deposit?](https://tessalor.com/en/money/savings-goal/save-for-a-house-deposit)

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