How much should I save each month to reach a savings goal?

Whether you are saving for an emergency buffer, home deposit, car or holiday, a target can feel less daunting when translated into a monthly figure. A savings goal calculation starts with how much you need and when you need it, then works backwards to the amount to put aside regularly.

Start with your goal, timeline and existing balance

Write down the target amount, any money already allocated to it, and how many months remain before your deadline. Keep the target separate from an emergency fund you may need to access for unexpected bills. Where the price of the future purchase could rise, consider whether the goal amount needs a buffer for inflation or price changes.

At zero interest, the simplest formula is (target − already saved) ÷ number of months. If you want £10,000 in two years and already have £2,000, the gap is £8,000. Over 24 months that is £333.33 recurring, but saving exactly £333.33 would leave a few pennies short; £333.34 a month reaches or slightly exceeds the target.

How compound interest reduces the amount you need to contribute

A savings account can add interest to money already saved and to new deposits. The Savings Goal Calculator uses a fixed annual equivalent rate (AER) converted into an effective monthly rate. It assumes you save at the end of each month and any credited interest compounds monthly.

The future value of existing savings is your opening balance × (1 + monthly rate)^months. The future value of equal month-end deposits is the deposit × (((1 + monthly rate)^months − 1) ÷ monthly rate). Solve for the deposit amount that covers the remaining gap, then round it up to the next penny. If the rate is zero, divide the gap by the number of months instead.

Worked example: a £10,000 target

Test these numbers: Load the £10,000 target with 4% AER, then compare with the same target at 0% interest. Both use £2,000 initially and 24 months. These are illustrative assumptions, not rate offers.

Suppose you have £2,000 already and want £10,000 after 24 months, with an assumed 4% AER. The interest earned on your existing savings and regular additions reduces the required monthly payment compared with the no-interest plan. Enter these figures into the calculator to see the monthly amount, estimated final balance, interest and total personal contributions.

Remember that a quoted account rate may change. The goal calculator deliberately uses one rate throughout the planning period, so treat the result as a baseline rather than a guarantee.

Choose a realistic monthly saving amount

Compare the calculated contribution with your take-home pay and essential outgoings. A standing order after payday can make saving consistent, but do not commit money needed for bills or leave yourself without an accessible emergency buffer. If the monthly figure is too high, you can test a later deadline, a smaller goal or an increased starting balance rather than relying on unrealistic returns.

What if the savings rate is lower or inflation is higher?

Run the plan at a lower AER to understand how dependent the goal is on interest. You can also use the Savings Interest Calculator if you want to model specific contribution frequencies, a cash-out date or interest crediting delays. For a goal several years away, use Inflation vs Savings to see how purchasing power may change.

Checklist to stay on track

• Give the goal a specific amount and deadline.
• Automate a sustainable regular saving amount.
• Monitor rates and switch products only after checking access terms and protections.
• Check progress quarterly and adjust for missed contributions.
• Review the target itself when prices change.

The projection excludes tax and fees. See MoneyHelper’s savings account guidance for more about accounts and access arrangements.

If your target is several years away, test whether the money you save will retain its purchasing power with inflation versus savings guide.