How the monthly amount is worked out
Your current savings keep growing on their own. The monthly deposit only has to cover the rest of the goal. Each deposit also earns interest from the month it goes in.
S is what you have saved, r the yearly rate divided by 12, and n the number of months.
Where to keep short-term savings
For goals under about 5 years, such as a down payment, car or emergency fund, most people use a high-yield savings account or CDs, where the balance doesn't swing with the stock market.
Frequently asked questions
How big should an emergency fund be?
A common target is 3 to 6 months of essential expenses. Enter that amount as your goal to find the monthly savings.
What rate should I use?
Use your savings account APY for cash goals. For long-term investing goals, a conservative 5–6% is a common planning figure.
What if the monthly amount is too high?
Push the deadline out a year or start with a smaller first goal. Try different time frames above.