Take a goal of R300,000 in 36 months, starting with R50,000 already saved, in an account earning 7 percent a year. The R50,000 keeps growing while you save, reaching about R61,646 after three years, so it covers part of the goal on its own. That leaves roughly R238,354 to fund from new contributions. Solving the savings formula for the monthly amount that grows to R238,354 in 36 months at 7 percent gives about R5,969 a month. Over the three years you contribute around R214,894 of your own money. Together with the R50,000 you started with, the remaining R35,106 of the R300,000 goal comes from interest earned along the way. Interest does part of the work, so you save less than the headline target each month.
Step
Amount
Goal in 36 months
R300,000
Current savings grow to
R61,646
Remaining gap to fund
R238,354
Monthly saving needed
R5,969
How it is calculated
The calculator works in two parts. First it grows your current balance forward at the monthly rate for the full number of months, since that money compounds whether or not you add more. It subtracts that grown balance from the goal to find the gap that contributions must fill. Then it solves the future-value-of-an-annuity formula in reverse for the level monthly payment, PMT, that grows to exactly the gap by the end date at the same rate. If your existing savings already grow past the goal on their own, the required contribution is zero. The interest earned shown is the part of the goal that came from growth rather than from your deposits. The rate is treated as fixed and the contribution as constant, so a variable rate or rising deposits will land slightly differently.
Frequently asked questions
How much must I save each month to reach a goal?
It depends on the target, how long you have, what you have already saved, and the interest your savings earn. This calculator grows your current balance and each monthly contribution at the rate you enter, then solves for the contribution that lands exactly on the target by the end date.
What interest rate should I use for a South African savings goal?
For a cash savings account or money market fund, South African rates have recently been in the 8 to 10 percent range, closely linked to the SARB repo rate. A conservative planning rate for medium-term goals is 7 to 8 percent. For goals funded through equity investments, a long-run real return of around 7 percent above inflation is a common assumption, but shorter time horizons carry more sequence risk.
How does starting with existing savings change the required monthly contribution?
Existing savings compound throughout the saving period and cover part of the goal on their own. The calculator grows your current balance forward at the monthly rate, subtracts that grown amount from the target, and solves for the monthly contribution needed to fill only the remaining gap. The larger your starting balance, the smaller the monthly contribution required.
What if I can save more than the required amount each month?
Saving above the required amount means you will reach the goal before your target date or exceed it by the deadline. The calculator shows the exact monthly figure to hit the goal on time. If you can afford more, you could shorten the timeline, raise the goal amount, or redirect the surplus to other financial targets such as an emergency fund or retirement savings.