Savings goal calculator.

Two questions, one tool

People ask about a savings goal in one of two ways. Either they have a date and want to know how much to save each month, or they have a monthly amount and want to know when they will get there. This calculator answers both. Fill the first group of fields for the first question and the last field for the second.

How it works

Without interest, the maths is simple: the remaining amount divided by the number of months. With interest, your existing savings and each deposit earn a little, so the monthly amount is lower. The calculator uses a monthly rate of one twelfth of the yearly rate and assumes deposits at the end of each month.

A worked example

Example only. You want 12,000 in two years and already have 500. With no interest, the remaining 11,500 over 24 months is 479.17 a month. At 4% a year, the same goal needs about 459 a month. If you can only save 400, the second answer shows the time: 29 months without interest.

Choosing the date

A date creates pressure, which is useful, but only when it is realistic. If the monthly figure feels like more than you can sustain, push the date out rather than abandoning the goal. A small amount saved every month for longer beats a heroic amount saved for two months and then dropped.

Interest assumptions

The interest field is optional. Leave it at zero if you are keeping money in cash at home or an account that pays almost nothing. If your account pays interest, enter the rate it pays after fees, not the headline rate. Do not assume investment returns for goals that are less than a few years away, because markets can fall just when you need the money.

Priorities

Build a basic emergency fund first. Then look at your goals by deadline: things you must pay by a date, such as a deposit, come before things you want eventually. If several goals compete, the Journal piece on saving for a house deposit and the one on sinking funds show how to split money between them.

Using the result in Vaulta

In Vaulta you create a goal with a target and a date, and the app shows the monthly amount and whether you are on track. The amount is taken out of safe to spend, so the money is not tempting you. See savings goals. The app itself is coming to the App Store.

How the calculation is done

With no interest: monthly = (target minus saved) divided by months. With interest rate i per month and n months: monthly = (target minus saved times (1+i)^n) times i, divided by ((1+i)^n minus 1). For the time question, the calculator solves the same relationship for n and rounds up to whole months.

When the monthly figure is too high

Move one lever at a time. First extend the date by a few months and see what changes. Then reduce the target by choosing a cheaper version of what you want. Then look for a one-off boost, such as selling something or directing a bonus, and enter it as money already saved. Do not do all three at once, or you lose sight of which choice made the difference.