Our savings calculator determines how much you'll save by a set date, given your deposit amount, interest rate & time (term).
Building savings can be the key to getting through tough economic times, as well as planning for future expenses. The Savings Calculator can help you determine how much money you need to contribute each month to build a nest egg.
Paltry U.S. Savings Rate
Even though conventional wisdom recommends that we have 6 months living expenses saved (perhaps more in uncertain economic times), Americans haven't been very aggressive about saving in recent years. However, as the economy has tanked, more folks are putting away money, resulting in the household savings rate in the U.S. rising to about 1.7% in 2008. Despite that change, many people aren't adequately prepared for financial emergencies, retirement, or paying for education costs.
Using the Savings Calculator
It can be tough to see the end of a savings goal without having a guide. The Savings Calculator allows you to plug in the amount you're willing to save every month, as well as the interest rate to see how much money you'll have after a specific period of time. For instance, if you save $200 a month for 60 months at an interest rate of 8%, you'll have $14,814.72 at the end of that period.
Of course you'll have to shop around for the best savings accounts and interest rates to build a sizable savings. Here are some types of accounts you may choose to use for your savings:
- Basic savings account, which generally pays a low rate of interest but is FDIC insured.
- Money market account, which usually pays more interest than savings accounts and may have higher minimum balance requirements.
- Certificate of deposit (CD), which has a fixed interest rate paid out upon maturity. The term of a CD typically ranges from one month to five years.
Why Build Savings?
Building savings can boost your overall financial health in many ways. Savings can be used:
- To escalate monthly payments and pay down debt faster.
- To save up a down payment for a mortgage.
- To help launch a business.
- To pay education costs for you or your children.
- To fund investments such as mutual funds or real estate.
- To pay for home improvements and renovations.
- To help fund your retirement.
Boosting Your Savings
After using calculators to see how your monthly savings will add up, it's time to find the funds in your budget. If you're having trouble seeing where you'll get money to put in savings, go through your expenses and start cutting out the extras.
Downgrade services you use regularly to find money to put away in an account. Avoid making impulse purchases when you're out. For many people it just takes a few adjustments to their spending habits to find money for savings.
It can be easier to make the cuts when you can afford to live more economically than to have life's unpredictable circumstances make these decisions for you.
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