Working backwards from a target
Most saving advice starts with what you can spare and hopes it is enough. Reversing that — starting with the target and solving for the contribution — turns a vague intention into a specific monthly number, which is far easier to act on and far easier to check.
The calculation accounts for growth on two things at once: the balance you already hold, compounding for the full period, and each new monthly deposit, compounding for however long remains after it lands. That second part is why the required contribution is always lower than simply dividing the target by the number of months.
Match the return to the timeline
This is the mistake worth avoiding. The right assumption depends entirely on when you need the money.
For a goal within about five years — a house deposit, a wedding, a car — use a savings account or fixed deposit rate. Capital preservation matters more than growth, because there is no time to recover from a fall. A 30% drawdown in the year you need the money is not a temporary setback; it is the goal missed.
For a goal ten years or further out, a market return assumption becomes reasonable, and the difference compounds meaningfully. Even then, plan to shift toward safer holdings as the date approaches.
When the number comes out too high
Three inputs can move, and they are not equally effective. Extending the timeline usually helps most, since it both spreads the contributions and buys compounding time. Reducing the target is the most direct. Raising the assumed return is the tempting one and the one to resist — it changes the spreadsheet without changing reality.
Frequently asked questions
How much should I save each month for my goal?
Enter the target, anything already saved, the time available and a realistic return. The calculator solves for the monthly contribution, accounting for growth on both your existing savings and each new deposit.
What return should I assume for a short-term goal?
For anything under about five years, use a savings account or short-term deposit rate rather than an investment return. Money you need on a fixed date should not be exposed to a market that can fall 30% in the year you need it.
What if the monthly amount is unaffordable?
Three things move it: extend the timeline, reduce the target, or increase what you have already saved. Extending the timeline usually has the largest effect, because it both spreads the contributions and gives them longer to grow.
Does this account for inflation?
No - the target is treated as a fixed cash amount, which is right for goals like a deposit or a car where you know the price today. For goals many years out, consider inflating the target yourself before entering it.