Simple Savings Calculator
We’ve created a very simple calculator to help you understand how much money you need to save each month to reach your goal.
About Short Term Goals
When it comes to financial goals, the type of goal matters a great deal to the method of reaching them. Long term goals, like retirement, are well-understood by most Americans as matters that require advanced planning. Many people never consider how to save for short-term goals, not when it is so much easier to just use credit when the date of purchase finally arrives, but if you know in advance you will need the money, save yourself the extra cost of paying back the debt with interest.
The first step is to determine the amount you will need and the amount of time you have available. For example, say that you need $3,000 to buy a car and you have 2 years in which to do it. To reach that, you need $125 a month, but where do you keep that cash during the intervening time?
The obvious answer would be to simply place the money in a savings account every month and be done with it. However, someone who can save for 2 years to purchase a car instead of financing it can manage the more sophisticated investment options. It is very important to choose wisely what type of investment, however, for many penalize investors for withdrawing cash so quickly.
The best investment options for short term goals are those that are not likely to lose value during the span of a couple years, will earn some money through interest, and have no penalty for withdrawing within a few years. Start with this calculator to figure out how much you’ll need to save each month, and then start researching your investment options.