Where do these numbers come from?
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Uses monthly compounding at a fixed rate.
The formula
With a goal FV, money already saved PV, a monthly rate i (annual rate ÷ 12) and n months, the monthly deposit is (FV − PV·(1+i)n) · i ÷ ((1+i)n − 1). At 0% it is simply (FV − PV) ÷ n.
Worked example
To reach $20,000 in 3 years with $2,000 saved at 4% a year: 36 months, i = 0.333%. Your $2,000 grows to about $2,254.54, so you need about $464.77 a month. At 0% you would need $500.00; interest saves you about $1,268.46 over the period.
Monthly deposit to reach a goal from zero
| Goal | 1 year | 2 years | 3 years | 5 years |
|---|---|---|---|---|
| $1,000 | $81.82 | $40.09 | $26.19 | $15.08 |
| $5,000 | $409.08 | $200.46 | $130.95 | $75.42 |
| $10,000 | $818.17 | $400.92 | $261.91 | $150.83 |
| $20,000 | $1,636.33 | $801.83 | $523.81 | $301.66 |
| $50,000 | $4,090.83 | $2,004.58 | $1,309.53 | $754.16 |
At 4% a year, compounded monthly, deposits at month end.
Make the plan stick
- Automate the transfer on payday so the money moves before you can spend it.
- Keep short-term goals (under about 3 years) in insured savings or similar low-risk accounts; rates change, so rerun the numbers when yours does.
- If the monthly amount is too high, extend the deadline: going from 2 to 3 years cuts the deposit by about a third.
How the monthly amount is found
The calculator solves the future value formula for the monthly deposit, with interest compounded monthly and deposits at the end of each month. Starting money counts toward the goal and grows too.
Setting a realistic goal
A common emergency fund target is 3 to 6 months of essential expenses. For goals under about 3 years, a high-yield savings account or Treasury bills keep the money stable; use a conservative return so you do not fall short.
Frequently asked questions
How much to save a month for $10,000 in 2 years?
About $416.67 at 0%; less with interest.
Does the calculator include taxes on interest?
No. Interest is usually taxable, which slightly raises the monthly amount you need.
What if my rate changes?
Enter the new rate and your current balance as "already saved" to recalculate from today.
What return should I use?
Use the current APY of the account you will use for short goals; for long-term investing, many planners use 5 to 7% before inflation as an assumption, not a promise.
Does this include taxes?
No. Interest is usually taxable.