# How Long Will It Take To Save? (Includes Calculator)

| Last update: 18 February 2022

When planning for a future purchase and devising a strategy for saving towards a goal, it can be tricky to work out how long it might take to achieve it.

Perhaps you're saving for a dream holiday and imagining laying on your sun lounger, sipping cocktails. Or maybe you have your mind set on a deposit for a house or a new car and want to understand when you might be able to lay your hands on the keys. Or perhaps you're wondering what age you might be able to retire at, and are looking at setting up a regular savings plan. Whatever the reason, help is at hand, so read on...

To assist you with your future planning, I've created an easy-to-use 'savings calculator'. To use this you will need to know your current savings balance, your savings target and the regular monthly amounts you intend to save. To assist you with reaching your savings goal sooner, you'll find some effective strategies for saving featured underneath the calculator.

If you would like to know how much to save each month to reach your target in a set period of time, please use the monthly savings goal calculator. Note that compounding is set to monthly and deposits are made at the start of each period.

## How long to save X?

\$
\$
\$
Calculation results will appear here.

## How long to save...

Below is a table showing how long it might take you to save for a specific amount from a \$0 principal figure with set monthly deposits and no interest.

Savings target
figure
Saving
\$200/month
Saving
\$300/month
Saving
\$400/month
\$5,000
25 months
17 months
13 months
\$10,000
50 months
34 months
25 months
\$20,000
100 months
67 months
50 months
\$30,000
150 months
100 months
75 months
\$40,000
200 months
134 months
100 months
\$50,000
250 months
167 months
125 months

The following example shows regular deposits of \$100 into a savings account (at the start of each month), with \$0 initial principal, at 0%, 3% and 5% annual interest rates, compounded monthly. It demonstrates how much quicker you can save for a goal with regular investing and compound interest.

Year
Balance
(0% rate)
Balance
(3% rate)
Balance
(5% rate)
1
\$1,200
\$1,220
\$1,233
2
\$2,400
\$2,476
\$2,529
3
\$3,600
\$3,771
\$3,891
4
\$4,800
\$5,106
\$5,324
5
\$6,000
\$6,481
\$6,829
6
\$7,200
\$7,898
\$8,411
7
\$8,400
\$9,358
\$10,075
8
\$9,600
\$10,862
\$11,823
9
\$10,800
\$12,412
\$13,661
10
\$12,000
\$14,009
\$15,593

## Effective strategies for saving

Now that you've calculated how long you need to save to achieve your goal, your next step should be to figure out an effective strategy to make the most of the money you're putting away. Consider the following questions:

1. Where should I put the savings in order to maximise interest?
2. How can I make the strategy of saving as easy as possible?

Look around for a good savings account that offers a high-interest rate and allows you to pay in regular amounts. Be aware that some accounts can offer you a high rate at first, before reducing down to a lower rate after a fixed period. If you look at fixed-term deposit accounts, bear in mind that whilst they tend to offer higher rates of interest, your money may be inaccessible for a number of years, when you may need it sooner.

It is worth noting that you can get higher interest rates from other forms of investment, so it may be worth talking to an independent financial advisor for some tips on this. Whatever you choose, by moving your money into an investment with a good interest rate, you will be able to take advantage of compound interest, which can give a healthy boost to your total.

To ensure that you keep making the regular monthly transfers required to achieve your savings goal without accidentally missing a payment, consider setting up an automatic monthly payment from your deposit account into your savings or investment account. You can then rest easy that everything is taken care of so that you're sipping drinks on your beach or taking possession of your car or house keys just when you expect to, without having to save any longer to achieve your goal.

If you would like some more tips on ways to increase your savings by making changes in your lifestyle, you could try reading about Financial Independence, Retire Early (FIRE). There's also a very comprehensive article on Jim Wang's Wallet Hacks website featuring 105 Easy Ways to Save Money.

Finally, we've written our own article with some saving tips for young people. Do take a look!

What are you currently saving for and what challenges are you facing? Share your comments below.

Article written by Alastair Hazell and reviewed by James Whittington.