Setting a savings goal feels personal. Hitting it is just math — and a little math literacy will save you years.
Calculators do the heavy lifting, but knowing what is going on underneath is what saves you money — or stress — later. Setting a savings goal feels personal. Hitting it is just math — and a little math literacy will save you years.
Future value = PMT × [((1 + r/n)^(n·t) − 1) / (r/n)] + PV × (1 + r/n)^(n·t)
'House deposit' is not a goal. '$30,000 by July 2029' is. Specificity makes the calculator and your brain agree on the same target.
Time, contribution, return. You control the first two; the market sets the third within a range. Increase contributions before chasing higher returns.
Standing order on payday is worth more than any willpower hack. The money is moved before you can spend it.
Invest, don't park. Cash loses 2–4% to inflation every year. Diversified index funds historically average 7–10% before tax.
What return assumption should I use? Use 4–5% for cash + short bonds, 6–8% for a balanced portfolio, 8–10% for equities. Always inflation-adjusted is more useful than nominal.
Should I save or invest first? Build a 3–6 month emergency fund in cash, then shift surplus to investments. Skipping the cushion forces you to sell at the wrong time.
Bookmark the calculator linked above — you will need it more often than you think. Try the How to Hit a Savings Goal linked above to put these numbers to work right now.