How to work out how long a savings goal takes

How much a month, for how long, at what return — fix any two and the third follows.

Whether saving for a deposit or an emergency fund, the arithmetic is the same: regular contributions plus growth on what has accumulated.

Step-by-step

1. Enter your target.
2. Enter what you can put aside monthly, and anything you already have.
3. Enter an expected return.
4. Read the time required, and how much of the total is growth.

Contributions dominate early, growth dominates late

This is the most useful thing to understand about saving. In the first few years almost all the balance is money you put in — growth on a small balance is small. Over long periods the relationship inverts, and growth can exceed everything contributed.

The practical consequence: for a short goal, focus entirely on the contribution, because the return barely matters. For a long one, the return matters enormously and small differences compound into large ones.

Be honest about the return

A savings account pays roughly its stated rate. Investments have an expected return with a great deal of variation around it, and the calculator's smooth curve does not reflect that — real markets fall as well as rise, and they may fall in the year you need the money.

For anything you need within about five years, use a cash rate rather than an investment return. Uncertainty you cannot wait out is not a risk worth taking with a house deposit.

Frequently asked questions

What return should I assume?

For money needed within about five years, use a cash savings rate. Over longer periods a diversified investment return is reasonable, but treat it as an average with a great deal of variation rather than a promise.

Does the calculator account for inflation?

It works in nominal terms. For a long goal, either increase the target to reflect what it will cost by then, or enter a real return with inflation already deducted.

Is it better to save more or earn a better return?

Over short periods, contributions dominate and the return barely matters. Over long ones the return does the heavy lifting. Increasing what you save is the part you control.