How Much to Save for a Goal
By Tools Star Hub Editorial Team · Published
The contribution is the amount you add each period so a starting balance reaches a target. At 0% interest, that amount is the gap divided by the number of deposits.
You type the time. The page solves for the contribution. It does not solve for the date. The rate is an assumption you choose, not a forecast of an account.
How to find the contribution
- Enter the target and what you have already saved. If current savings are already at or above the target, the page asks for a higher goal or a lower starting amount. It does not show a contribution of 0 as a new plan.
- Enter an annual rate, or 0. Use 0 if you do not want to assume interest. Sample rows at 0%, 3%, 5%, and 7% are other assumptions, not predictions.
- Enter the years and how often you add money. The choices are monthly, every two weeks, weekly, or once a year.
- Divide the gap when the rate is 0. At a rate above 0, current savings grow first, and each contribution is added at the end of the period. The payment is the amount that makes the ending balance equal the target.
- Read interest apart from money you put in. A higher assumed rate usually lowers the contribution, because the balance is estimated to earn interest. That rate is not guaranteed, and the page does not subtract taxes or fees.
Example
10,000 over 2 years at 0%
Nothing saved, monthly deposits, is 24 periods. The contribution is 416.67 each month. Interest is 0, and the deposits add up to 10,000.
4,000 already saved toward 10,000
At 0% for 1 year, monthly, the gap is 6,000 over 12 months, so the contribution is 500.
Things to watch
Which calculator to use
Use the Compound Interest Calculator when you already know the contribution and want the ending balance. This page runs the question the other way.
FAQ
- How do I split a goal with no interest?
- Subtract what you have from the target, then divide by the number of deposits. 10,000 over 24 months with nothing saved is 416.67 a month.
- Why do the 3%, 5%, and 7% rows differ?
- Each row uses that rate as an assumption. A higher rate usually means a smaller contribution. None of the rows is a promised return.
- Can I ask how long a fixed deposit will take?
- You enter the years. The page then solves for the contribution.
- What if I have already reached the goal?
- Raise the target or lower the starting amount. A reached goal is rejected.
To solve for the regular contribution, use the Savings Goal Calculator.