Use this savings goal calculator to figure how much you...show more instructions
Ramp Up Your Savings With Today’s Top Savings Rates
How Much Should You Save To Reach Your Financial Goal?
Saving money – it’s easier said than done! According to one study, the average American family’s savings account balance is $3,800. Moreover, 25% of American families have no savings at all.
Do you know how much to save each month in order to reach your savings goals?
Whether you’re building an emergency fund, saving for a down payment on a house, or figuring out how much you need to save for your dream vacation, this Savings Goal Calculator can help.
Common Reasons For Not Saving
Recognizing some of the most common reasons people don’t save can help you avoid their fate. Which of these reasons are holding you back from saving?
- There is nothing left after expenses to save – It is really difficult to save when you don’t earn much money. But if you don’t find some wiggle room in your budget to start saving now while you’re thinking about it, you might find yourself set in your ways . . . never saving for the future.
- Some people are addicted to shopping – Some people spend all their money shopping to look good even if they are broke. Don’t be silly buying expensive branded items or things that you don’t need just because your favorite celebrity is wearing it. The easiest way to break this habit is to avoid going to stores – especially the mall. Discipline yourself by using money you’ve already earned – not charging something you can’t readily pay. Your inability to buy something with cash is a good indicator that you can’t afford it.
- There might be too much debt to pay – What is your debt-to-income ratio? The generally expected debt-to-income ratio for every household is 36% or less. If your ratio is more than 50% you should be concerned. To calculate your debt-to-income ratio, divide the sum of your monthly reoccurring debt payments by your gross monthly income. Paying off debt helps you keep more of your money which you can then put toward savings. To figure out how much you need to pay each month to be out of debt by a certain date, use the Debt Payoff Calculator.
- Savings account interest rates are low – Today, you’d be lucky to find savings accounts that deliver 1% interest rates. In decades past, interest rates were much higher. Current interest rates are very upsetting to savers but you should not use this as a reason not to save. Instead, focus on the high-interest savings accounts that are out there.
- People naturally want to spend instead of save – Your spouse and children want to spend. You are even telling yourself to spend! Hardly anyone in your life encourages you to save – don’t you find that’s true? Overcoming this pressure to spend is really difficult. But if you care enough for your family’s future, beat the spending mentality by encouraging yourself to start saving.
How Much Should You Save Each Month?
Before you begin saving, ask yourself, “What is my reason for saving?” It’s also important to figure out your financial goal and when you’d like to achieve it. Use the Savings Goal Calculator to figure out how much you should save each month to reach your financial goal.
When Is The Best Time To Start Saving?
The best time to start saving is now. However, it’s important to have a savings plan that still allows you to pay your necessary bills and obligations. Remember, paying off debt, cutting expenses, and paying attention to your financial behaviors are great ways to grow your capacity to save.
Saving is a key factor to creating wealth – start as soon as possible!
Savings Goal Calculator Terms & Definitions
- Savings Goal – The amount of money you want to have in the future.
- Current Savings Balance – The money you already have saved that will be applied toward your savings goal.
- Annual Percentage Rate Growth – The annual percentage interest rate or return on investment you expect to earn on your savings.
- Number of Years – This is the number of years between now and when you want to achieve your financial goal.
- Current Savings Future Value – The value of your current savings plus interest earned.
- Savings Shortfall – How much savings you are short from achieving your goal given your variables.
- How Much To Save Each Month – The amount you need to save each month to reach your financial goal.
Related Savings Calculators:
- Savings Account Calculator: How long until I reach my savings goal given the amount I’m currently saving each month?
- Compound Interest Calculator – Monthly: What will my monthly savings deposits grow to when compounded monthly?
- Compound Interest Calculator – Daily To Yearly: What will my savings grow to when varying the deposit intervals and the compound intervals from daily to yearly (and everything in between)?
- Future Value Calculator: What will be the future value of my savings growth after adjusting for taxes and inflation?
- Inflation Calculator: How has inflation affected the purchasing power of my savings from one year compared to any other year in history?
- Interest Calculator – Simple Monthly Payment vs. Compound Growth: How much will my savings earn if I spend the interest every month vs. compound it for growth?
- Latte Factor Calculator: How much do small, regular expenses (like a daily latte) really cost me in terms of savings?
- Spending Calculator – True Cost To Own: How much does that one-time expense truly cost me over many years?
- Saving Money Calculator: How much money can I save by switching from a high-cost name brand to low-cost generic?
- Millionaire Calculator: How long until I grow my savings to a million dollars and what will it be worth after adjusting for inflation?
- Present Value of Annuity Calculator: What is the present value of a series of equal cash flows to be received in the future?