Savings Goal Calculator
What to put aside each month to hit a target. Or how long your current rate will take.
In short
Work backwards: subtract what you have from the target and divide by the months available. Set the resulting amount as a standing order for the day after payday, so saving happens before spending rather than after.
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Work backwards, not forwards
Most people save whatever is left at the end of the month, which is usually nothing. Starting from the goal and dividing by the deadline produces a specific number, and a specific number can be set up as a standing order the day you're paid.
That ordering, save first, spend what remains: is the single change that separates people who hit savings goals from people who intend to. It removes the monthly decision entirely.
When interest starts to matter
| Horizon | Interest contributes | Worth modelling? |
|---|---|---|
| Under 1 year | Under 2% | No |
| 1–2 years | 2–4% | Barely |
| 3–5 years | 6–12% | Yes |
| 10 years | 25–30% | Substantially |
Figures assume around 4% a year on a rising balance. The pattern: for short goals your contributions do essentially all the work, and chasing an extra half percent of interest is wasted effort compared to saving £20 more a month.
Inflation moves the target
A savings goal is usually for a thing, and things get more expensive. A £20,000 car in five years costs about £22,600 at 2.5% inflation. Saving exactly £20,000 leaves you £2,600 short of the car, having hit the number precisely.
Tick the adjustment to plan against the future price. It's uncomfortable and it's correct, and it's why long savings goals for specific purchases are harder than they look.
Where to keep it
Under three years: a savings account, cash ISA or equivalent. Money you have a date for should not be exposed to market risk, a 20% drawdown in the month you need it is not a hypothetical, and you have no time to recover.
Three to five years: mostly cash, perhaps a modest allocation to investments if the deadline has some flex.
Beyond five years: investing becomes reasonable, and over long horizons cash reliably loses to inflation. Accept that the path will be bumpy.
Whatever you choose, use a separate account. Money mixed with current spending gets spent, not through weakness, but because there's no signal that it was earmarked.
Before you start saving, two checks
Emergency fund first. Three to six months of essential expenses, held in cash. Without it, the first unexpected bill raids the savings goal or goes on a credit card, and either way you're behind.
High-interest debt beats any savings rate. Paying down a 22% credit card is a guaranteed 22% return. No savings account competes. Clear expensive debt, then save.
If the monthly number is unaffordable
There are only four honest levers, and optimism isn't one of them:
- Extend the deadline. Usually the least painful.
- Reduce the target. A cheaper car, a smaller deposit.
- Increase income. Slowest, and often the highest ceiling.
- Cut spending. Real, but bounded. You cannot cut below your fixed costs.
Running the number and finding it uncomfortable is the calculator doing its job. A plan that only works if nothing goes wrong isn't a plan.
Arithmetic for planning, not financial advice. Rates, tax treatment and product rules vary by country. Check with a qualified adviser for decisions of any size.
Frequently asked questions
How much should I save each month?
Work backwards from the goal rather than picking a round number. Enter the target and your deadline and the tool solves for the monthly figure. If the answer is uncomfortable, the honest options are a later deadline, a smaller target, or more income, not optimistic arithmetic.
Should I count interest?
For goals under two years, barely, interest on a modest balance over 18 months is small enough to ignore. Beyond three years it starts to matter meaningfully. Enter the rate your account actually pays, not an aspirational one.
Why does inflation matter for a savings goal?
Because the thing you are saving for gets more expensive while you save. A £20,000 car target set five years out needs closer to £22,500 at 2.5% inflation. Tick the inflation adjustment to see the target in future money rather than today's.
Where should I keep the money?
For anything you need within about three years, a savings account or cash ISA. Capital you cannot afford to lose does not belong in the market, where a bad year could take 20% off just as you need it. For longer horizons, investing becomes reasonable, with the volatility that implies.
What if I can already save more than needed?
Then you will hit the goal early, and the tool shows the date. Worth checking whether higher-interest debt would be a better home for the surplus, clearing a 20% credit card beats any savings rate available.