How to Set a Realistic Savings Goal

A savings target becomes easier to plan when you connect three numbers: the amount you want, what you have already saved, and when you want to use the money. The monthly amount also needs to fit your real budget.

Work out a starting monthly amount Suppose your target is $20,000 (or £20,000), you have $3,000 (or £3,000) saved, and you have 24 months. Ignoring interest, the remaining $17,000 divided by 24 is about $708.33 per month. This is an example, not a recommended target; use the amount and timeframe that fit your circumstances.

Consider the account and access you need An emergency reserve may need to be accessible, while money for a distant goal may have different requirements. Rates, access rules, fees, tax treatment, and protections vary by account and country. Check the terms directly rather than assuming a particular return. MoneyHelper's guide to setting a savings goal covers choosing a target, working out a monthly amount, and setting up regular saving.

Revisit the plan when things change If the monthly amount is too high, you can extend the timeframe, lower the target, or review your budget. If your rate changes or you make an extra deposit, recalculate. The MoneyPath Savings Goal Calculator can estimate a required monthly deposit or a time to goal using the rate you enter. Its result assumes a steady rate and monthly deposits; real accounts can differ.

For emergency savings, choose an amount and access arrangement that make sense for your needs. MoneyHelper also explains how much to save for emergencies.