Instrument 06 · Protect
Savings Goal Calculator Name It. Date It. Divide It.
To reach a savings goal, subtract what you have saved from the target and divide by the months left: $3,000 in 12 months with $600 saved is $200 a month. Interest lowers it slightly — $194.46 at 4% APY. Add several goals and it becomes a sinking-fund plan: one monthly figure that funds every known future cost.
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Deposits land at the end of each month; interest compounds monthly at the rate implied by the APY. Tax on interest is not modelled.
Every month, across all goals
You arrive in
Enter a target to see the date.
Covered means what you already have, plus any interest, reaches the target on its own. A goal due now shows its shortfall instead of a monthly figure.
Reading Your Result
What The Number Is Telling You.
- Covered
- What you have — plus interest — already reaches the target.
- On track
- Save the monthly figure and the goal arrives on time.
- Due now
- No months left. The shortfall is shown; move the date or the target.
The Model
The Formula, In Full.
The arithmetic this instrument runs, with a worked example. Its test cases are published on the methodology page
i = (1 + APY)^(1/12) − 1 (monthly rate from APY)
Monthly = (Target − Saved × (1 + i)^n) × i ÷ ((1 + i)^n − 1); when i = 0: (Target − Saved) ÷ n
Months, given a monthly amount P: n = ln((Target × i + P) ÷ (Saved × i + P)) ÷ ln(1 + i), rounded up; when i = 0: (Target − Saved) ÷ P, rounded upWorked example. 3,000 target, 600 saved, 12 months: 200.00 a month at 0%, 194.46 at 4% APY. Default three-goal plan: 150.00 + 200.00 + 83.33 = 433.33 a month at 0%.
Assumptions and edge cases
- Deposits are made at the end of each month.
- Interest compounds monthly at the rate implied by the APY you enter.
- Tax on interest is not modelled.
| Edge case | Behaviour |
|---|---|
| Months = 0 | "Due now" with the shortfall; no division. |
| Saved ≥ target | "Covered", monthly 0. |
| Saved grows past target with interest | "Covered" — e.g. 990 saved at 5% reaches 1,000 in 12 months. |
| Monthly amount 0 at 0% (reverse mode) | "Not at this pace". |
| Result above 600 months | "More than 50 years". |
Questions
Savings Goal, Answered Plainly.
How much should I save each month to reach my goal?
Subtract what you have already saved from the target, then divide by the number of months until you need the money. Saving for 3,000 in twelve months with 600 already put aside means 200 a month. If the money earns interest, the monthly figure falls slightly; the calculator above applies the exact formula, including the interest, as you type.
What is a sinking fund?
A sinking fund is money set aside a little at a time for a known future expense — car insurance, a holiday, a new laptop, holiday gifts. Instead of one large bill arriving as a shock, the cost becomes a small monthly line in your budget. The term comes from corporate finance, where companies set aside money in advance to repay a debt when it falls due.
What is the difference between a sinking fund and an emergency fund?
A sinking fund pays for something you know is coming; an emergency fund pays for something you hope never comes. Car insurance due in March is a sinking fund. A lost job or a burst pipe is an emergency. Keeping them separate protects the emergency fund from predictable bills, which is the most common way it gets drained.
Which sinking funds should I have?
Start with the costs that surprise you every year even though they should not. The usual list is annual insurance premiums, car maintenance, holiday gifts, travel, annual subscriptions, medical and dental costs, home repairs, and replacing a phone or laptop. Three to six funds cover most households. List the last twelve months of irregular bills and each one becomes a candidate.
Should I keep savings goals in a high-yield savings account?
For goals more than a few months away, yes — but expect a modest effect. Saving 3,000 in twelve months with 600 already saved takes 200 a month at 0 per cent and 194.46 a month at 4 per cent APY, about 66 less over the year. The bigger benefit of a separate account is that the money stops looking like spending money.
How do I save for several goals at once?
Give each goal its own target and date, work out each monthly amount, and add them together into one figure you move on payday. That total is your sinking-fund line. Goals with nearer dates need larger monthly amounts, so the order of your goals matters less than their dates. Add every goal to the calculator above and it produces the total for you.
What if I miss a month of saving?
Recalculate rather than doubling up blindly: take what you have now, the same target and the months that remain, and the calculator gives the new monthly amount. If the new figure is not realistic, move the date or reduce the target — a goal adjusted honestly is still a goal, while one quietly abandoned is not.