Savings goal
Children’s education, a down payment, a car or a trip: work out how much to save each month to get there on time, with rising prices.
How your savings grow
Table
How it is calculated
First the calculator converts the goal into future prices: it gets more expensive by the given percentage each year. Then it works out the monthly contribution that, with returns and existing savings, grows to that amount by the deadline.
Contribution = (future price − savings × (1 + r)n) × r / ((1 + r)n − 1)
- For goals 1–3 years away, use safe instruments: deposits, bonds, money market funds.
- For 5–15 years you can add stocks: higher returns, but also more volatility.
- Save for your children’s education in the currency you will pay tuition in.
The Wealth Plan financial checkup puts all your goals into one plan and shows whether your budget covers them along with your own pension.
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The financial checkup works out whether your budget covers all your goals and your pension, and suggests where to start. Free, 10 minutes.
FAQ
How much should I save each month to reach a target amount?
It depends on the amount, the time frame and the return. Without returns it is simply the amount divided by the number of months. With returns the contribution is smaller, since interest earns part of it. The calculator also accounts for the goal getting more expensive.
How do I save for my child’s education?
Estimate today’s cost of study (studying abroad costs $20,000–60,000 a year), multiply by the number of years and enter the time until enrolment. Save in the currency you will pay in, and reduce portfolio risk as the date approaches.
Where should I save for a goal?
The closer the deadline, the safer the instrument. For 1–3 years, deposits and bonds; for 5 years or more, a balanced portfolio. Keep goal money separate from your emergency fund.