How much should I save each month?
Both directions of the same question: the monthly contribution that reaches a target by a date, and the date a contribution you can afford would reach it.
For a goal a few years out, a savings account or GIC rate is the realistic one.
Save each month
$663.61
to reach $50,000 in 5 years.
- A month
- $663.61
- A week, roughly
- $153.14
- Over the period
- $39,817
- Growth does the rest
- $5,183
Two questions, one calculation
"What do I need to put away each month" and "when would I get there saving what I can" are the same arithmetic run in opposite directions. The first is solved in closed form; the second is walked period by period until the balance passes the target.
Choosing a return
The horizon should decide it. For a down payment three years out, money that has to be there on a specific date does not belong in the stock market: a savings account or a GIC rate is the realistic assumption, and it will be low. For a goal fifteen years away a market return is defensible. Entering an optimistic rate on a short-horizon goal is the most common way to arrive at a monthly figure that turns out to be too small.
When the answer is that you get there anyway
If what you have already saved grows past the target on its own, the calculator says so rather than returning a contribution of zero without explanation. And if a contribution never reaches the target, it says that too, rather than returning a hundred-year answer that reads as a real one.
Where this fits
For a house, the target is not just the down payment: closing costs land on the same day and in Ontario or British Columbia they are substantial. The down payment calculator gives the figure worth aiming at. For an emergency fund, the target is a few months of your own essentials, which the can I afford it calculator works out.
What this assumes
- A steady return
- Which no real investment delivers. Over a short horizon that variation matters most.
- Contributions never miss
- Every month, on time, for the whole period.
- The target is in today's dollars
- If the thing you are saving for gets more expensive while you save, the target moves and the contribution has to move with it.