Savings goal calculator: How to reach your financial objectives

Saving with a clear purpose can be what makes the difference between a good attempt and a true financial plan. Want to know how much money you need to set aside each month to reach your financial goal? This is no longer about guesswork or using impossible mathematical formulas. The answer is that now you can do it with our savings goal calculator. Plus, in this article, we not only explain how it works but also reveal all the keys to growing your savings smartly.

Savings Goal Calculator

What is a savings goal calculator?

A savings goal calculator is a comprehensive tool that helps you figure out how much you need to save regularly in order to reach a financial goal within a specific timeframe.

Unlike our compound interest calculator, this one is not focused on how much your investment will grow over time, but rather on how much you need to contribute to reach your desired target.

This tool is very useful for all kinds of goals, such as:

• Saving for a house down payment
• Paying for your children’s education
• Building an emergency fund
• Reaching financial independence

No matter the goal: if you have a number and a timeframe, you can calculate it in a realistic and simple way.

How does our savings goal calculator work?

Our calculator is very intuitive to use. To input your data, you just need to provide the following:

• Target amount - For example, 20,000 euros in savings.
• Savings timeframe - In how many years you want to achieve it.
• Expected return - This depends on whether you keep it in an interest-bearing account or invest it.
• Contribution frequency - monthly, quarterly, annually…

Based on the data you enter, the calculator will show you how much you should save each period to reach your goal.

And what if you're aiming for financial freedom? This tool is also useful if you're thinking long-term. Imagine you want to generate passive income that covers your monthly expenses. In this case, the calculator can help you estimate the capital needed. At the very least, it serves as a guide to set your goals appropriately.

What should you consider before setting your goal?

When thinking about savings, it's important to estimate the goal you want to reach. However, don't overlook the economic context or your personal circumstances. Below, we outline the key factors to consider:

1. Inflation - This is one of the silent threats to your savings. A goal of, for example, 20,000 euros today may not have the same value in five years. You can learn more about this in our article on how much money you should have saved by age 30.
2. Return and risk - It's not the same to keep your money in a non-interest account as to invest it with an estimated 5% return. The higher the return, the faster you can reach your goal. But be cautious: higher returns often come with higher risks.
3. Liquidity - Assess your financial situation and ask yourself: will you need access to that money before the deadline? Not all savings or investment options offer the same flexibility. Choose the one that best suits your needs.
4. Commitment - There's no point in giving up at the first challenge. Are you willing to stick with your effort for months or years? Automating your savings can help you stay disciplined.

Where can you invest your savings to make them grow?

Reaching a savings goal doesn't always depend on how much you’re able to save. In many cases, it will mostly depend on how you make your money work. Here are some interesting options:

• Interest-bearing accounts - A safe option, but with low returns.
• Treasury bills - A good choice for those seeking a low-risk investment. We explain this in more detail in our article on whether it's safe to invest in treasury bills.
• Index funds - One of the most attractive options for long-term goals.
• Crowdlending - An alternative investment option with potential returns over 6%, and with the added benefit of helping finance the real economy. This is an attractive option for investors and one we offer at Inversa.

Take the next step: turn your goals into action

Having a goal is just the first step. To reach it, you'll need consistency, a solid strategy, and above all, smart investing. At Inversa, we want you to achieve all your goals. That’s why on our platform you can put your savings to work, diversify your portfolio, and move toward your financial goals faster.

Don’t hesitate to contact us with any questions and, of course, broaden your options with our platform, where investments are real, transparent, and accessible.