The formula
How to calculate monthly savings needed
This works the savings problem from the deadline backwards: you know the amount and the date, and you need the monthly figure that gets you there. Money already saved does part of the job by growing on its own.
The starting balance is compounded forward to the target date first, and the monthly payment is then sized to fill only the remaining gap — which is why a healthy opening balance cuts the required deposit by more than its face value.
What to enter:
- Target amount
- Saved so far
- Years available (years)
- Annual return (%)
The result updates on every keystroke. The URL updates too, which makes the filled-in version easy to bookmark or send to someone else.
Worked example
Here is the calculation with the starting values:
- Target amount: 30,000
- Saved so far: 6,000
- Years available: 5 years
- Annual return: 4 %
That gives:
- Save each month: 342
- Total deposited: 20,519.79
- Growth contributes: 3,480.21
Reading the result
If the answer is uncomfortable, there are only three levers: a longer deadline, a smaller target, or a higher return — and the third is the one you do not control. Extending five years to seven usually does more than any plausible change in the return assumption.
Where this goes wrong. A negative result means the balance you already hold grows past the target on its own. That is not an error; it means no further deposits are needed.
Take the deposit you need, subtract what you hold, and divide across the months available at a cash rate. Most deposits fall inside five years, so assume savings-account interest rather than investment returns.
Because you gain twelve extra payments and a full year of compounding on everything already saved. Both work in the same direction, which is why the curve is steeper than it looks.
It returns save each month. With 30,000 target amount, 6,000 saved so far and 5 years years available, that comes to 342. Change any field and the figure moves with it.