How to plan for a savings goal
- Enter the goal in today's money and the years until you need it.
- Enter the return you expect, plus inflation and any money already saved.
- Read the monthly saving needed and the working.
Examples
A goal of ₹10 lakh in today's money, 10 years away, with 6% inflation and a 12% return: the goal grows to ₹17,90,848, and you need to save ₹7,707.91 a month.
The same goal with ₹1 lakh already saved: that grows to ₹3,30,039 by then, so the monthly saving drops to ₹6,287.40.
₹5 lakh needed in 5 years at an 8% return, with no inflation added: save ₹6,759.80 a month.
About this tool
Tell the page what your goal costs today and how many years away it is. It raises the goal by the inflation you expect, grows what you've already saved at your expected return, and works out the monthly saving that covers the rest, using the same formula as a monthly SIP. Every step of the working is shown, so you can check it or change the assumptions.
Common questions
What formula is used?
The goal after inflation is goal x (1 + inflation)^years. Each month's saving counts from the start of its month, so monthly saving = amount still needed / ([((1 + i)^n - 1) / i] x (1 + i)), where i is the monthly return and n the number of months.
Why add inflation?
A goal priced today costs more later. At 6% a year, something that costs ₹10 lakh today costs about ₹17.9 lakh in 10 years, so saving for ₹10 lakh would fall short.
What return should I expect?
Use a rate that fits where the money will go: a fixed deposit's rate for an FD, or a cautious figure for equity funds. Returns aren't guaranteed, and a lower figure gives a safer plan.
How is money I've already saved counted?
It's assumed to stay invested at the same return until the goal. What it grows to comes off the goal before the monthly saving is worked out.
Is it free to use?
Yes. There's no sign-up, and you can use it as often as you like.
Is my text uploaded anywhere?
No. This tool runs inside your browser, so what you enter stays on your device.
Do I need to install anything?
No. It works in your browser on a computer or a phone.