Savings Goal Calculator: How Much Should You Save Each Month?

Big plans deserve a plan. Set the goal, and we work out the monthly amount.

Set a goal and a time frame, and the calculator works out how much you need to set aside each month to get there.

From wish to plan in a few clicks

The big events in life rarely come as a surprise. A driving license, a graduation party, a wedding, a vacation or the down payment on your first home: we usually know they are coming. Even so, they can cause financial stress if there is no plan.

The calculator starts from your goal and works out how much you need to set aside each month to get there. Pick one of the presets or set your own amount and time frame.

How to use the calculator

• Goal: the amount you want to have saved by a certain date.
• Starting amount: what you have already saved and bring with you from day one.
• Time: how many years you have.
• Share in stocks: how much of your savings goes into stocks. The rest goes into a savings account or bonds.
• Return: one expected return for the stock part and one for the low-risk part.

The calculator blends the two returns according to your split and works out the monthly amount that gets you to your goal. It also shows how much you pay in overall and how much comes from returns.

Should you invest the money?

The rule of thumb is simple and follows your time horizon:

• Less than two to three years to your goal: keep the money in a savings account. The risk that the market falls just when you need the money is too high.
• More than five years to your goal: investing in stocks becomes a reasonable option. Historically, a broad global stock index has returned around 6% to 7% a year on average, but with big swings along the way.
• Close to the payout: lower your risk step by step. Gradually move from stocks to bonds or cash, so that one bad year just before your goal does not ruin the plan.

The share-in-stocks slider is in the calculator precisely so you can see the difference between these scenarios in euros and cents, instead of guessing.

What time does to the monthly amount

Time is the cheapest tool you have. To save €10,000, about €167 a month is enough over five years with no return, but over ten years about €83 is enough, and with returns on a longer savings plan the amount drops even further. If you start just two years before your goal instead, you need more than €400 a month.

That is also why it pays to set the goal before it becomes urgent. A goal that is five years away is something you can save for. A goal that is six months away is, in practice, something you can only borrow for.

Note: the calculation is before tax. Depending on where you live, returns on your savings may be taxed, and how much often depends on the type of account you use.

Keep calculating

If you would rather see how long it takes to reach an amount with a given monthly contribution, the first million calculator works the other way around. And if your goal is far in the future, it is worth checking what inflation does to the amount in the future purchasing power calculator: a down payment that is enough today will not necessarily be enough in ten years.

Sources

The calculator uses the standard compound interest formula based on your own numbers and does not fetch any external market data. The return figures are assumptions you choose yourself, not forecasts.

Frequently asked questions

How much do I need to save each month to reach my goal?

It depends on the target amount, how much time you have and the return you expect. If you want €10,000 in five years and the money sits in a savings account that pays no interest, you need to set aside about €167 a month. If you assume a 5% return, the amount drops to about €144.

Should I invest the money or keep it in a savings account?

The rule of thumb follows your time horizon. With less than two to three years to go, keep the money in a savings account, because the risk that the market falls just when you need it is too high. With more than five years to go, investing in stocks becomes a reasonable option. In between, a mix of the two usually makes sense.

What does the share in stocks mean in the calculator?

The slider sets how much of your savings goes into stocks. The rest goes into a savings account or bonds. The calculator then uses a blended return weighted by that split, so a higher share in stocks gives a higher expected return but also bigger swings.

How should I adjust the share in stocks to the time left?

A common rule of thumb is to lower the share in stocks as you get closer to your goal: around 100% stocks with ten years or more to go, 70% at seven years, 50% at five years, 30% at three years and 0% for shorter horizons. The point is that one bad year in the market just before your goal should not be able to ruin the plan.

What if I have already saved some of the money?

Enter it as your starting amount, and the calculator counts it from day one and lets it grow over the whole period. If your starting amount already covers the goal, the calculator tells you so instead of suggesting a monthly amount.

Is the amount in the calculator before or after tax?

The calculation is before tax. Depending on where you live, returns on your savings may be taxed, and how much often depends on the type of account you save in. So treat the result as a guide and add a little margin, especially over longer time horizons.