Have you ever used a savings calculator? Saving money every month is a great habit to get into. Even if you only tuck away a bit of money every pay day, you build up a bit of a safety net if anything goes wrong. Or – and this option is significantly more exciting – you build up a nice little nest egg to treat yourself with.
Maybe you can get that car you always wanted. Or that dream holiday. Or maybe that renovation that you’ve been putting off for years.
However, knowing how much you need to save – and how much you have to tuck away each month to get there – is a different thing entirely.
For that, you need a savings calculator.
What is a savings calculator?
They might sound complicated, but they’re anything but. You have two options – you can tell the savings calculator that you need ‘£xx’ by a certain date and it’ll tell you how much you need to save a month to save that. Or, you can tell the savings calculator that you can afford to save ‘£xx’ a month and what you’d like to save and it’ll tell you how long it’ll take to hit your target.
That’s all there is to it, really.
Give it a go – Money Advice Service savings calculator has a great savings calculator .
How much do I need to save a month for my dream car, holiday or that renovation work I’ve been putting off for years, then?
This is a tricky one to answer. Obviously, the cost of each is going to vary. You might want a new Audi or you might want a classic 1977 Triumph Stag (if so, good choice). You might want a trip to Paris or you might want a round-the-world cruise. You might fancy a lick of paint and some new cushions or you might need a completely new extension.
If you’ve got something very specific (or a specific budget) in mind, give the savings calculator above a go.
However, if you’re thinking generally, let’s assume you need around £10,000 to get well on your way.
How long would that take you to save if you tucked away £200 a month in an account that gives you 1% interest?
Bleep, bloop, bleep.
It would take: 4 years and 2 months.
‘That’s a long time to wait!’
Aha! That’s the great thing about the Money Advice Service savings calculator – it doesn’t just tell you how long it will take to save, it also helps you budget and see areas you might be able to cut back to save more. (We’ve compiled a list of great budget planner apps too – check them out.)
That way, if you don’t want to wait over 4 years for your dream expense, you can work out ways to speed the process up.
Want to dream a little bigger? Use this savings calculator to see when you’ll be a millionaire
Just like Del Boy, who hasn’t dreamt of being a millionaire?
And, while for the vast majority of us, being a millionaire is probably only going to happen if we get very, very lucky (or in the wildest of our day dreams), this calculator shows you that it’s not entirely impossible to be a millionaire by the time you’re approaching your old age.
Imagine retiring and having a £1,000,000 to enjoy yourself with. Not a bad thought…
Speaking of retiring…
This calculator helps you get a good idea of how much you need to save to retire comfortably. (Fair warning, it’s in dollars, but the rough principle still applies in the UK.)
It’s a good resource actually, showing you that – even if you only tuck away a small percentage of your salary away for when you get older, you’ll still be OK.
If you’re looking for tips on how to trim your spending – or maybe how you can save even more – we’ve got a tonne of posts on our blog about frugal living and watching the pennies.