How it works
The calculator solves for the required monthly contribution given:
- Your goal amount
- Current savings (compounded forward)
- Time horizon
- Expected return
It uses the future-value-of-an-annuity formula and works backward.
What to know
- HYSA for short-term goals. Anything under 2 years should sit in a high-yield savings account (4 to 5% APY currently), not stocks.
- Treasury bills for 1 to 5 years. Higher yield than HYSA, backed by the federal government, no state tax.
- Index funds for 5+ years. Stock market volatility is fine over long horizons.
- Automate it. Set up a recurring transfer the day after payday. You will not see the money, you will not miss it.
Worked example
Goal: $50,000 down payment in 4 years. Current savings: $5,000. Expected return: 5%.
Required monthly contribution: ~$830
If goal stays the same but timeline extends to 6 years, monthly drops to ~$520. Time is the cheapest thing to "buy" yourself.
Frequently asked questions
Should I save in a savings account or invest?
Depends on the timeline. Under 2 years: HYSA. 2 to 5 years: T-bills or short-term bonds. 5+ years: low-cost index funds.
What is a realistic return for short-term savings?
4 to 5% APY in a high-yield savings account as of 2026. Online banks like Marcus, Ally, Wealthfront, and Discover all offer this, FDIC-insured.
What if my goal is more than I can afford monthly?
Three options: extend the timeline, lower the goal, or increase income. The calculator shows you the math so you can pick.
Does inflation matter for short-term goals?
Yes. A $50,000 goal today is $52,000 in 4 years at 1% net inflation (HYSA returns minus actual inflation). For most short goals this is small enough to ignore.