The Savings Calculator, as with the other financial calculators on this site, makes it easy to do financial planning. Any simple savings calculator can calculate a final value, but this one will solve for any one of four possible unknowns. More below
Periodic Deposit Calculator
According to Larry Light writing in Forbes, "don’t set a deadline, set a schedule." You'll achieve better results if you adhere to a periodic savings plan than if you haphazardly make deposits.
You can set the "deposit/investment frequency to weekly to make this a Weekly Savings Calculator, or to monthly to make it a Monthly Savings Calculator.
There are eleven deposit frequencies from which to pick. Pick the one that is right for you. To establish the savings habit, I suggest you select a periodic deposit that aligns with your employer's pay schedule.
After the calculation, you can click on the schedule button to create a savings schedule at your selected frequency. Or if you are more visually inclined, check out the various charts.
With this one calculator, you can answer for yourself questions such as:
- What will my savings grow to after "X" years?
- How much should I save each month?
- What is the interest rate?
- How long will it take to reach my goal?
There are other questions you can ask yourself, and this Savings Calculator will answer them for you.
Saving a Dollar a Day Calculator
Let's show off the flexibility of this calculator and have some fun while we are at it. (This is particularly fun to do with kids.) How much do you think you'll have if you save just a dollar a day for forty years - a working lifetime? What will be the gain on the savings? That is, how much of the final value will be from the daily dollar saved and how much will be from investment gain?
What do you think?
To try the dollar-a-day calculation, set the calculator this way. (Of course, set the dates as needed and change the interest rate to suite.)
Savings on Hand (PV) (can be 0): $0.00 Periodic Savings Amount?: $1.00 Number of Periods to Save? (#): 14,600 Annual Interest Rate?: 4.5% Goal Amount (future value)?: $0.00 Today's Date?: 03/01/2023 First Deposit Date?: 03/01/2023 Deposit/Investment Frequency?: Daily Compounding?: Daily
Note, I selected 4.5% as the interest rate, not that you will earn that on a bank's savings account. But it's about halfway between the rate-of-return on 10-year US treasury bonds and the average return for the US stock market.
I'll leave it to the reader to do the calculation.
But the interest earned from daily compounding is almost twice the amount the user invested!
This savings plan calculator provides the user with enough flexibility that you should be able to test just about any savings plan. You should find it relatively simple to answer the question, "how will my savings grow?"
If you don't, please ask.
Calculate 4 unknowns.
If you have already started to save toward a goal, enter the amount you have saved in "Savings on Hand". Otherwise leave this set to zero.
This calculator will calculate any one of four variables: "Annual Interest Rate or ROI", "Number of Periods to Save", "Periodic Savings Amount" and "Goal Amount". Enter zero for the one unknown.
Example, if you want $100,000 after 15 years and you can afford to save $5,000 a year, what interest rate do you have to earn on your savings? Since we are going to solve for the return on investment, enter "0" for the "Annual Interest Rate". Let's assume we'll make an annual contribution to our savings plan once a year. Therefore, enter "15" for the "Number of Periods" Also set the "Savings Frequency" and "Compounding Frequency" to "Annually". Enter "5,000" for the "Periodic Savings Amount" as the amount saved each year. Enter "100,000" as the "Goal Amount"
Click "Calc" and the result should be "3.5%".
So, in order to reach your goal of $100,000 after 15 years, you'll need to earn 3.5% on your annual deposits. In a similar way, you can also calculate how much you have to save periodically or what amount you'll have after saving a specified amount. Finally, you can also calculate how long it will take to reach a goal. Simply enter a "0" for the unknown and enter the other values.