Welcome to our Saving for a Goal Calculator! Whatever you need to save for, this calculator will help you do it. For more information about saving for a goal, read our informative article below the calculator!
How Should You Be Saving for a Goal?
Let’s say you want to save for your children’s college education, a new flat screen television, or a vacation to Hawaii. The math isn’t always clearcut, especially when rate of return is involved.
Thankfully, our Saving for a Goal Calculator makes the math easy. It’s also one of the most flexible savings calculators around.
Here’s what you need to know about the calculator and saving for goals:
How to Use the Saving for a Goal Calculator
There are a number of important variables the calculator uses to determine your results. Additionally, you can solve for any one of these variables:
- Number of Years – How long do you want to take to accomplish your savings goal?
- Annual Rate of Return – What annual percentage will you make on the money you invest in a savings account or other investment account?
- Opening Balance – How much money do you have that you already put toward your goal? The more the better!
- Ending Balance – This is your pre-tax balance, which represents your goal.
- Monthly Savings – This is how much you save toward your goal every single month until you reach your maximum number of years of saving.
- Tax Rate – What is your total tax rate, including city, state, and federal taxes?
You can also set your compounding interval for your investment or savings account.
This calculator, therefore, allows you to answer questions such as:
- How long will it take me to reach my savings goal?
- How much do I need to save every month to reach my savings goal?
- How much will I save by a certain time?
- And many more questions . . . . try it out!
When to Save for a Goal
So you want to save for a goal. That’s fantastic! But before you get started, make sure you’re doing so in the right timing.
Have you completed Phase I: The Foundation Phase? More than likely, you’ll want to focus on these goals before you focus on other savings goals.
For example, it would be unwise to take an extravagant vacation when you haven’t even saved up money in an emergency fund. Make sure to set your priorities straight.
Write out the financial goals you should accomplish first before you save for discretionary items or services.
How to Save for a Goal
There are a number of different strategies for saving for a goal. Here are a few of the best ideas:
1. Create a Separate Savings Account
Make sure your savings don’t end up being spent on fast food by creating a separate savings account. You can create a savings account for your goal at your local bank and nickname it so there’s no confusion.
2. Get Accountability
It’s a fact that those with accountability accomplish their goals more often than those who haven’t told their friends and family. Tell them that you’ll save for a period of time, and tell them how much! Make sure that you tell those who are going to be supportive of your goal, not jealous of it.
3. Methodically Save Extra Money
At Truth in Financial Planning, we teach that all extra income (like gifts, overtime pay, and unexpected income) should be split 70/30. In other words, 70% should go toward your financial plan, and the other 30% should go toward discretionary fun money.
If you’re at the stage in your financial plan where you’re saving for a big purchase, perhaps that 70% could go toward your savings goal!
Saving money is a rewarding experience. And it’s especially rewarding when you hit your goals!
Make a list of savings goals and work on them one at a time if possible. You don’t want to overwhelm yourself – just focus on one savings goal and move on to the next when you’re done.
Have fun saving!
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