Monthly Savings Calculator

Use this calculator to determine how much money to save each month to hit a target amount.

What this calculator does

The monthly savings calculator works backward from a target and timeline to estimate the monthly deposit required.

It uses:

• target amount
• months to goal
• annual interest rate
• starting balance

Monthly Savings Formula

PMT = (FV - PV x (1 + r)^n) x r / ((1 + r)^n - 1)

Where:

• PMT = required monthly savings
• FV = target amount
• PV = starting balance
• r = monthly interest rate
• n = number of months

Example calculation

If:

• Target amount = 12,000
• Starting balance = 2,000
• Time = 24 months
• Annual interest rate = 3%

Then:

• Required monthly savings = about 404
• Total contributions = about 9,696
• Interest earned = about 304

The required monthly savings amount is about 404.

What is monthly savings?

Monthly savings is the amount set aside each month toward a future financial goal. It turns a large target into a repeatable monthly habit.

Why monthly savings matters

• makes goals easier to budget for
• shows whether the timeline is realistic
• helps automate savings behavior
• reduces dependence on last-minute cash

When to use this calculator

• setting a monthly savings target
• planning a purchase with a fixed deadline
• testing different goal timelines
• checking the effect of starting balance

Common mistakes

• setting the target without a deadline
• assuming interest will do most of the work
• forgetting to include the starting balance
• ignoring affordability in the monthly budget

Monthly savings vs savings goal

Monthly savings is the recurring amount you contribute. A savings goal is the final target you want those contributions to reach.

FAQs

What is monthly savings?

Monthly savings is the amount you regularly set aside toward a future goal.

How do you calculate monthly savings?

Subtract the future value of your starting balance from the target, then spread the remaining amount across the months with interest.

What is a good monthly savings amount?

A good amount is one you can repeat every month without creating new debt or missing essential expenses.

What is the difference between monthly savings and a sinking fund?

Monthly savings is the deposit amount. A sinking fund is the dedicated account or plan for a specific future expense.