Savings goal calculator: how much to save each month
Start from the goal and work backwards. This calculator shows the monthly amount, or the one-time amount, needed to reach a target by a date.
How to use this calculator
- Enter the goal amount and say whether it is in today's money or the future money you will really need.
- Enter what you have already saved for it.
- Enter the years left and a cautious yearly return.
- Read the monthly saving and the one-time alternative.
Worked examples
Example 1
₹25,00,000 in today's money needed in 8 years, ₹2,00,000 saved, 10% return, 6% inflation.
You enter
| Goal amount | ₹25,00,000 |
|---|---|
| Already saved for it | ₹2,00,000 |
| Years to go | 8 |
| Expected return (per year) | 10% |
| Is the goal amount in | Today's money (adjust for inflation) |
| Inflation (per year) | 6% |
You get
| Goal in future money | ₹39,84,620 |
|---|---|
| Monthly saving needed | ₹24,023 |
| Or one lump sum today | ₹15,96,350 |
| Total you would put in monthly | ₹23,06,216 |
Example 2
A goal of ₹10,00,000 in 3 years, kept safer at a 6% return.
You enter
| Goal amount | ₹10,00,000 |
|---|---|
| Already saved for it | ₹0 |
| Years to go | 3 |
| Expected return (per year) | 6% |
| Is the goal amount in | Future money (as is) |
| Inflation (per year) | 6% |
You get
| Goal in future money | ₹10,00,000 |
|---|---|
| Monthly saving needed | ₹25,295 |
| Or one lump sum today | ₹8,35,645 |
| Total you would put in monthly | ₹9,10,637 |
How it works
Goals that are years away cost more than they do today, so a goal in today's money is raised by inflation first. A child's education fund is a typical example.
For money you need soon, use a low return. Savings meant for a fixed date should not depend on a high return.
Formula
Future goal = goal x (1 + inflation)^years. Monthly saving = (goal - savings x (1 + i)^n) x i / (((1 + i)^n - 1) x (1 + i)).
Common questions
Should I include inflation?
Yes for long goals.
What return should I use?
A cautious one; use a low figure for short goals.
What if I cannot save that much?
Extend the time, lower the goal or save a lump sum.
Learn more
Read the lesson Goals and time horizons on pusaram.com for the ideas behind this calculator.
Calculators give estimates for learning and planning. They are not financial, tax, legal or medical advice, and results depend entirely on the numbers you enter. Check rates, limits and rules with an official source or a qualified professional before acting.