Saving to a goal

It is the solution of the accumulation equation: the start compounds, contributions arrive at each month’s end and compound too. The formula picks the one contribution at which the final month’s balance equals the goal.

On long horizons — the rate: interest on interest grows non-linearly. On short ones — the start and the contribution itself, because compounding lacks time. Try the term in the form: stretching 5 years to 7 cuts the contribution far more than a couple of extra rate points.

It does: a start-of-month contribution catches that month’s interest, an end-of-month one does not. The calculator uses the end-of-month convention — conservative and consistent with the deposit calculator. Over five years the difference is a fraction of a percent.

The rate is your input: a deposit, a savings account, bonds. Size an instrument’s yield in the “Deposit” or “Dividends and bonds” calculator and plug it in here. For a safety cushion measured in months of expenses there is a dedicated calculator.

No — the goal is set in today’s rubles. If you are saving for something that gets dearer, check its future price in the “Inflation” calculator and make that the goal: at 8% a year, today’s million costs 2 158 925 ₽ in 10 years.

The projection assumes regularity; a skip moves the finish line or requires slightly larger contributions afterwards. Recompute with the actual balance as a new start and the months left — the calculator gives the new contribution instantly.

Indexing it at least to inflation is sensible: income usually grows, and a frozen contribution gets ever easier — and ever weaker. Recompute the plan yearly with the actual balance: a raised contribution visibly pulls the finish closer, or lets you raise the goal itself.