A Savings Account Calculator that Puts Your Money to Work

This simple savings calculator will tell you how much to save to reach your goals fast

Savings is hard. Not only do you have to stretch your budget, but you can’t even be sure if your savings account is going to grow fast enough to reach your goals.

Don’t worry, I’ve got you covered on both counts.

Use this simple savings calculator to find how far your current savings will take you and how much you need to save each month to meet your goals. Scroll down for a detailed walk-through of the calculator and some easy tips to save money and make extra cash.

%

How to Use the Savings Account Calculator

My goal with this savings calculator was to make it as simple as possible but still helpful in planning your goals. There’s just four numbers you need to find how much your savings will be worth and how much you need to save.

First is to figure out how much you want to save. Most people go right to retirement savings for this but it doesn’t have to be.

You can use the savings account calculator to test different savings goals:

Don’t just estimate how much it will cost to save for your goal. Really visualize your goal, what you’ll do in retirement or that dream vacation. Making a mental picture is going to make the goal real.

It will help motivate you when the budget gets stretched and will help you make a better estimate for how much it’s going to cost.

Once you know how much you want to save, enter how much you’ve already saved into the calculator. That might not mean your combined savings. Special goals means special savings.

Next is probably the most uncertain part of the savings calculator, the interest rate on your savings.

Just as your savings target will depend on your goal, so will the interest rate. You wouldn’t put your short-term emergency fund in stocks. You’d invest them in short-term bonds and money market savings earning a few percent at best.

Consider using the following rates for different savings goals:

  • Long-term investments might earn 5% to 7% on a blended portfolio of stocks, bonds and real estate. I have some easy investment calculators here to help estimate your retirement income and build your nest egg.
  • Short-term investments for goals within a few years might earn 3% to 5% in a portfolio of bonds and some stocks
  • Emergency funds might earn 1% to 3% on safe bonds and money market

Finally, enter the number of years you plan on saving. This will depend on your savings goal, either the years you have to retirement or maybe years to your child’s tuition needs.

Hit calculate and the savings tool will tell you the value of your current savings at the end of your time frame. This doesn’t include any future savings, just what you have saved now and how fast it will grow.

The savings calculator will also show you how much you need to save each month to meet your savings goal.

Let’s look at an example using the savings plan formula:

Jim is trying to save $1 million over the next 35 years and has $50,000 saved now. We’ll use 6% as an investment return since this is a long-term investment.

easy savings plan formula worksheet

The calculator estimates that Jim will have $384,304 by the time he retires in 35 years. That’s well below his $1 million savings goal but still a respectable amount for retirement. Jim also sees that he needs to save $432 a month to reach his goal by the time he retires.

simple savings account calculatorSaving that much every month may be tough for most people but you can play around with the savings goal and years to your goal to find a good balance. I would caution against changing the interest rate much.

Your investments are based on your risk tolerance. Chasing higher returns is going to put you in investments that might not be appropriate and might just cause you more stress than you can handle.

How to Grow Your Savings Plan Faster

The savings account calculator will give you the facts. There’s no numerical magic here. If you don’t like how the numbers come out, there are two ways to change it.

You need to attack your savings on both sides. I see too many people fixate on trying to save money from a budget that’s already squeezed tight. Sometimes you just can’t save much more from your budget.

That means you need to look at making money as well.

This doesn’t mean you have to take a second job. Just five hours a week can turn a side-hustle into over $10,000 extra a year.

First, a couple of must-read articles on saving money.

One easy way to save money is to pay less interest on your debt. You can save thousands of dollars a year simply by consolidating your loans or adding more to the payoff amount. Use this simple loan payoff calculator to see how much you can save.

You can only save so much. After a while, you’re just sacrificing too much and are going to burn out. You have to live for today while saving for tomorrow.

That means making a little extra cash so you can still reach your savings goals without having to skimp your whole life.

savings account calculator for kids

You don’t have to be a money nerd like me to appreciate a good savings calculator. Play around with the numbers to find exactly how far your savings account will grow before you need it. The calculator is a great financial tool to cut down on the uncertainty in saving while you focus on what’s important.