How to plan a savings goal
- Enter your Savings goal, what you’ve Saved so far and the yearly Interest rate your account pays (0 if it pays none).
- Choose Monthly saving and type how many years you have, or choose Time needed and type what you can save each month.
- Read the amount to save or the time it takes, the interest you’ll earn and the month you’ll get there. The table shows your balance at the end of each year.
Picking a realistic goal
A goal with a date and an amount is easier to stick to than “save more”. Common ones are an emergency fund, a house deposit, a car or a trip. For an emergency fund, a widely used guideline is three to six months of essential spending; add up rent, bills, food and debt payments to get your figure.
Once you know the monthly amount, set up an automatic transfer on payday so the money moves before you can spend it. If the amount is more than you can manage, try a later date or a smaller first goal and build from there.
How much interest helps
Over a few years, interest makes a modest difference: in the example above it covers about 6% of the goal. Over longer periods it matters much more, because interest is earned on earlier interest. For goals more than five years away that you can invest for, see the compound interest calculator, and for retirement saving, the retirement calculator.