Saving toward a goal, not just saving
A vague intention to "save more" rarely survives a busy month. A specific number and a date turns it into a monthly figure you can automate and forget — which is the single most reliable way to actually get there.
The formula
The calculation works in two parts. First, your existing savings grow on their own:
future value of savings = current × (1 + r)^nWhatever gap remains between that and your goal has to come from monthly contributions, which is the future value of a regular payment stream rearranged to solve for the payment.
Why the return matters more over long horizons
Over a year or two, the expected return barely changes the answer — you are mostly just setting money aside. Over ten or twenty years, growth does an increasing share of the work, and the required monthly contribution falls sharply as a result. The same goal that needs a large monthly amount over three years needs far less over fifteen.
Be honest about the return
For a near-term goal you cannot afford to miss — a house deposit in two years — assume a low, safe return, because you cannot risk a market fall just before you need the money. For a distant goal, a diversified investment return is reasonable. Matching the risk to the timeline is the judgement that matters here.
Built by Mohammed Jamil. Corrections to [email protected].