Savings Goal Calculator

A common benchmark is saving 20% of your take-home pay, but the right amount depends on your goals and timeline. For retirement, a general rule is to save 15% of gross income starting in your 20s. For shorter-term goals like a house down payment or emergency fund, calculate the target amount divided by the months you have available, then check if that monthly figure fits your budget.

Higher interest rates reduce the monthly savings needed to hit a goal because your money grows while you save. At 0% interest, reaching $10,000 in 24 months requires $417/month. At 4.5% annual interest (compounded monthly), you only need about $389/month. For longer time horizons and larger goals, even a 1-2% difference in your savings account rate makes a meaningful difference in the monthly contribution needed.

For goals under 2-3 years away, a high-yield savings account (HYSA) or money market account offering 4-5% APY is typically best -- your money is FDIC-insured, accessible, and earns meaningful interest. For goals 5+ years out, a brokerage account investing in diversified index funds historically outperforms savings rates, though with more short-term volatility. Do not invest money in stocks that you will need within 3 years.

If the debt carries a high interest rate (above 7-8%), paying it off first typically gives a better guaranteed return than saving. Build a small emergency fund of $1,000-2,000 first to avoid needing to take on new debt for minor emergencies. Once high-interest debt is cleared, redirect those payments to your savings goal. For low-rate debt like student loans at 3-4%, saving and paying debt simultaneously makes sense.