Savings goal: turn a target into a monthly plan

Give the goal a dollar amount and a date

A useful savings plan starts with two numbers: the amount you want to have and the time available to build it. FCAC recommends identifying and prioritizing financial goals, setting a dollar amount and setting a timeframe.

Our savings-goal calculator works backward from those inputs. It adds what you already have saved, then estimates the end-of-month contribution required to reach the target under the return assumption you enter.

A five-year example

Suppose the target is C$50,000 in five years and C$5,000 is already saved. At a hypothetical 3% annual return, the model estimates a required contribution of C$684.47 a month. At 0%, the required contribution is C$750.00 a month.

The difference is not a promise of investment gains. It shows how sensitive the plan is to one assumption. If the deadline matters more than the upside, test a lower return as well as the optimistic case.

Understand what compounding is doing

Compound interest means previously earned interest can itself earn interest. FCAC notes that the compounding frequency affects how a savings balance grows.

The Money Figures savings models convert the annual return you enter into a monthly growth rate. In the five-year 3% example, the projected growth contribution is C$3,931.90; the rest comes from the starting balance and monthly deposits.

Real investment returns can be negative or uneven. The calculator uses a constant rate only to make scenarios comparable.

Match the plan to the time horizon

FCAC separates short-, medium- and long-term goals and notes that shorter-term money generally needs more emphasis on protection and accessibility. A calculator cannot decide how much market risk is appropriate for you.

Use the savings-goal tool to answer “how much per month?” and the compound-growth tool to explore a longer series of contributions. Keep the return input consistent with the type of account or investment you are actually considering.