How to use this calculator
Start from the goal, not the saving:
- Target amount is the number the goal truly costs: the down payment, the car, the wedding, the first year of tuition.
- Years to reach it: your real deadline. The result is extremely sensitive to this input, so be realistic about it.
- Expected annual return. Match it to where the money will really sit: cash rates for goals a couple of years out, blended or equity-like returns only for long horizons.
- Current savings toward it: anything already earmarked, since it shrinks the required monthly amount.
The bar chart shows how the answer moves at 3–11% returns, and the table re-solves the same goal for five different timelines so you can see what an extra few years buys you.
Working backwards from the goal
Most planning tools project forward: given savings, they estimate a future balance. Real goals run the other way — you know the car costs $30,000 or the down payment is $100,000, and the question is what it demands from each month's budget. This calculator solves that inverse problem exactly. With the defaults (a $100,000 target, 10 years, 7% expected return and $5,000 already saved) the answer is $519.70 per month.
Look at where the $100,000 comes from: your monthly contributions total $62,363.67, your existing $5,000 keeps working, and investment growth supplies the remaining $32,636.33, about a third of the target. The longer the timeline, the more of the goal growth pays for: stretch the same goal to 20 years and contributions fall to $36,768 while growth covers $58,232, more than half.
Time is the input that changes everything. Halving the timeline far more than doubles the monthly bill. This goal needs $153.20 a month over 20 years but $519.70 over 10. Cutting the time in half multiplied the requirement by 3.4×, because you lose both saving months and, disproportionately, the compounding those months would have done. Squeeze it to 5 years and the number jumps again to $1,297.78. Starting early isn't a platitude here; it is the arithmetic.
The return assumption deserves the same honesty. Between 5% and 9% (a plausible range of outcomes for a diversified portfolio) the required monthly swings from $590.96 to $453.42. Plan on the conservative end; a goal funded at pessimistic assumptions gets finished early when markets cooperate, while the reverse leaves you short at the deadline.
Formula and methodology
The future value of the current savings plus an end-of-month contribution stream is set equal to the target, then solved for the contribution:
Ttarget amountPcurrent savings toward the goalimonthly rate (annual rate ⁄ 12, compounded monthly)nmonths until the deadline (years × 12)
If P × (1 + i)n already meets or exceeds the target, the required contribution is zero: the goal is funded by growth alone and the results show your projected surplus instead. At a 0% return the formula reduces to simple division: (T − P) ⁄ n, which for the defaults would be $791.67 a month — a useful worst-case anchor.
Worked example
Monthly rate i = 0.07 ⁄ 12 = 0.005833, n = 120 months. The $5,000 head start grows to 5,000 × (1.005833)120 = $10,048.31 on its own, leaving $89,951.69 for contributions to cover.
C = 89,951.69 × 0.005833 ⁄ [(1.005833)120 − 1] = $519.70 per month.
Check it forward: $5,000 growing at 7% with $519.70 added monthly lands on $100,000.00 at month 120, to the cent. Of the final amount, $62,363.67 is contributions and $32,636.33 (including the growth on the head start) comes from returns.
What changes the result
- Timeline dominates. The default goal costs $153.20/month over 20 years, $519.70 over 10, $1,297.78 over 5. Each halving of time roughly 2.5–3.4× the monthly requirement.
- Return assumption. From 3% to 11%, the requirement falls from $667.33 to $391.96 — but you don't control returns, only contributions and time. Assume less, contribute more.
- Head start. Raising current savings from $5,000 to $15,000 cuts the monthly amount from $519.70 to $403.59; a windfall aimed at a goal buys a permanently lighter month.
- Goal size is negotiable. Trimming the target 10% to $90,000 lowers the requirement to $461.92, sometimes the cheapest lever of all.
Assumptions and limitations
- The return is a flat assumption; real portfolios wobble year to year, and a bad stretch near the deadline matters more than one at the start. De-risk as the goal approaches.
- Short-horizon goals shouldn't use equity-average returns at all; over two or three years, use a savings or deposit rate and see the Savings Calculator.
- Results ignore taxes, fund fees and inflation of the goal itself: a house deposit ten years out will likely cost more than today's figure, so revisit the target periodically.
- Contributions are modeled as identical every month; pausing early costs more than pausing late.
Frequently asked questions
What if the required monthly amount doesn't fit my budget?
You have three levers, and all are quantifiable. On the defaults ($519.70/month): extending the deadline from 10 to 12 years drops it to $393.63; trimming the target 10% to $90,000 drops it to $461.92; finding $10,000 more up front (a bonus, a sale) drops it to $403.59. Combine two levers and most "impossible" goals become ordinary line items. What rarely works is assuming a higher return to make the number smaller.
What return should I assume for my goal?
Match the assumption to what you'd actually hold for that horizon. Money needed in 1–3 years belongs in cash or deposits; assume today's savings rates, not market returns. Around 5 years, a conservative mixed portfolio might justify 4–6%. Only genuinely long goals (10+ years) can lean on long-run equity averages, and even then planning at the lower end of the range is the safer habit.
Why did the monthly amount jump so much when I shortened the timeline?
Two effects stack. Fewer months means each must carry more of the target, which alone would scale the number linearly. But shorter timelines also strip out compounding: over 20 years growth funds $58,232 of the default goal, over 5 years only $17,133. That is why halving the time from 20 to 10 years multiplies the requirement by 3.4×, not 2×.
The calculator says I need $0 a month. Is that right?
It means your current savings, growing at the assumed return, already reach the target on schedule. For example, $6,000 earmarked toward a $10,000 goal at 7% projects to $12,057.97 in 10 years, a $2,057.97 surplus with no contributions at all. Verify the return assumption is realistic for the account the money sits in; if it is, you can redirect that monthly budget to the next goal.
Should I save monthly or invest a lump sum if I have one?
Mathematically, money invested earlier compounds longer, so deploying an available lump sum toward the goal usually beats drip-feeding it — enter it under current savings and watch the required monthly fall. Monthly investing is the answer for money that arrives monthly, i.e. income. The Lump Sum Investment Calculator covers the one-off side in detail.