Financial Goal Calculator – Calculate How Much You Need To Save In 3 Easy Steps

If you are dreaming  to buy a new car, go for a vacation, thinking to buy a new home , simply saving for your retirement etc. then financial goal calculator comes handy for any type of financial goals you have in your mind.

Calculate the amount you need to save periodically to reach a desired financial goal using financial goal calculator by moneycontain.

You just need to enter the desired goal amount at first, fill in the time duration in months and enter the expected rate of return, in just 3 easy steps the calculator will show you in seconds about how much you have to save every month to achieve that goal. So, go ahead and try it yourself.


Now that you know the amount you need to save every month, it becomes really important to know where and how to invest this money to achieve the desired goal.

It is because, whatever is your goal the most important factor is the rate of return you are expecting from your investments.

Another important factor that you need to consider while making savings every month and investing is inflation and its role on returns you would get at the end. So let us begin to understand all this concepts step by step without using financial jargons.

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What Is Financial Goal Calculator and Its Purpose? 

In my childhood days I remember I asked my dad to buy me a bicycle that too with gears, being from a normal lower middle-class family it was not easy for my father to approve any of my wishes instantly.

So instead he bought me a piggy bank and said ‘You have to start saving some money in this piggy bank until you have money that can afford and met all your demands’.

At that time I simply rejected his idea, I was living in my own world like any other child and just wanted to have that bicycle that I see everyday in my school.

But there was no other way, my father being from an army background it was very tough to persuade him, he himself used to go to his office either using his old bicycle or simply walking, telling how good it is for fitness.

Finding no way, I started saving little bit of money that I get from here and there and used to put that in to piggy bank thinking all night about how amazing I would feel when I will drive that, I have even imagined cycling to all places nearby that I have seen and flaunting it in front of my friends.

Long story cut short, I was not able to save a lot and even have withdrawn multiple times from that piggy bank?? but still managed some savings.

Keeping the story aside, Savings do place a greater role in everyone’s life that one understand better with time. Savings is a gradual process that may need time and effort but it’s worth doing.

It is important to save regularly so that you can meet your everyday expenses, medical emergencies, future purchases (car, motorbike), and investments.

As much as savings are important investing it in correct way plays a significant role. Before we go to investing let us first see how to use goal calculator and what does it tell you.

Let us take an example of a short term financial goal:

Suppose you want to buy a two-wheeler after 18 months and you need Rs. 100,000 (lacs) corpus for that, in order to do so, how much you need to save every month and invest to attain your dream motorbike goal.

I have calculated the same assuming you invest that money and get a 15% returns on the investment during the tenure.


how much you need to save every month


As you can see in the image above using moneycontain financial calculator, the answer is Rs.4,989 approx. 5K every month. I know you might be thinking, how you going to get that much return, no worries I have discussed the types of investment that can give you the different returns depending upon your need later below in this post.

Before we discuss the different financial instruments available for investment and which is better, you need to keep another point in my mind ‘Inflation‘.  Let us first discuss inflation and its importance so you have a complete picture.


What Is the Impact Of Inflation On  Savings And Investments?

To better understand the concept one should be very well aware of the future value of money in present terms. In other words, if you have a present value and you want to calculate a future value, we call it an interest rate (compounding).

Whereas, if you have future values and you want to estimate their worth today, we use a discount rate (discounting).

Interest rates and discount rates are two sides of the same coin. Discounting, is the act of determining how much less tomorrow’s currency (rupee) is worth.

As you would be investing your money, you should know the (TMV) “time value of money” the value of money does not remain the same across time.

Meaning, the value of Rs.1000 today is not really Rs.1000, 5 years from now. Oppositely, the value of Rs.1000, 5 years from now is not really Rs.1000 as of today.

Whenever there is motion of time, there is an element of opportunity. Money has to be accounted or adjusted for that opportunity and in above case it is inflation.

Inflation can be defined as the increase in the prices of regular or everyday use goods and services like food, grocery, clothing, land, housing, medical care, education, electronics etc.

Now to counter inflation you should know the real returns also known as inflation adjusted return from your investment rather than the simple returns. To better understand let us take an long term goal example this time:

You are worried about your children higher education when they turn 18, therefore you thought of investing some money every month so that you can avoid making lumpsum arrangements when they grow up.

In order to do so you made an estimation about the expenses you need to make at that time and you come to conclusion that Rs. 10 lakh would be sufficient for the same.

At present your child age is 9 Years, which means you still have 9 years, let us first use Financial goal calculator to know how much you need to save and invest every month in order to achieve this corpus.

how much i need to save every month


As you can see by using the financial goal calculator you come to conclusion that you would need to invest 5K approx. every month for 9 years at a nominal interest rate of 12.5%.

But here is the thing as I said above, you need to account impact of inflation on your investments.

Let us see using moneycontain present value calculator about the value of your future money in present terms. Check out the image below:


present value calculator


As you can see using the present value aka discounting calculator , assuming a average inflation rate of 5% p.a for next 9 years the value of your returns would be only around 6.5 lakh, a steep decline of 35.54%, this may shock you for a while but this is what it is.

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Inflation eats up and erodes your return with time, so what you can do now to accomplish the financial goal about your child higher education.

There are only 2 things you can do either increase the investment amount every month i.e. instead of 5k, invest much more or choose the right investment option which can deliver you better returns with time.

This is what we are going to discuss next but before we do so in brief let me tell you how you can calculate the inflation-adjusted returns on the investment instead of just nominal returns.

The reason I am telling you this is because next time when you make any investments in any form to attain your financial goals you have the correct picture of the returns you would be getting in future.


How To Calculate The Real Returns?

Many people make a mistake of calculating the inflation adjusted or real interest rate, what they do is just subtract the nominal interest rate by inflation rate and think it as correct way of doing it.

For example :

Let say the average inflation for last 5 years is 4.5%,  you made a investment which gave you nominal interest of 15%. When you subtract 15-4.5 = 11.5%, now this is the very basic way of doing the calculation to know inflation adjusted returns or real returns on your investment.

As inflation and returns compound, the correct way or formula to calculate real returns is given below:

Inflation-adjusted return = (1 + Return) / (1 + Inflation) – 1 *100

Applying the formula by using above no.

(1+15%)/(1+4.5%) -1 *100= 10.04%, this is correct return you should expect on your investment post inflation. You can get the inflation rate from here.

Let us now focus back on different types of investment options available to you as an investor and who is best amongst them.

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How To Reach Your Financial Goal ?

There are different types of investment options available for everyone depending upon their need, below I have listed some of them. We will discuss in brief about which one have highest possible returns as well as the one’s those  have limited risk profile.

1. Stock Market (Equity) Investing in equities i.e. stocks can garner you greater CAGR returns, consider investing in them for long to medium term.

However you need to keep in mind the risk associated while investing as they are highly volatile in nature and one wrong investment can lead to disaster.

For example: Tata Consultancy Services Limited (TCS) which is one of the leading IT company in India has given about 30% p.a. overall returns in last 10 years.

Auro Laboratories a leading pharma company has given about 42% return in last 5 years. Having said that there are bad examples too, but if you do proper technical and fundamental research than investing can be done in equities.

MRF shares have generated multi fold returns for the investors over the years.

If an investor had invested Rs 1 lakh in MRF shares 25 years ago, the corpus would have been worth Rs 74.02 crore in April 30, 2018 when the stock was its peak.

Even 1 share costed Just Rs.11 in the year 1993 which at the peak (2018) was around Rs.81,423.

Most of the experts in finance have suggested investing in equities as the best method to beat inflation in long run.


2. Mutual Funds (SIP/Lumpsum) –  Investing in mutual funds can not only generate better returns but also the risk associated while investing comes down significantly.

Most of us do not have much time reading and learning about investment and can’t track stocks every now and then, therefore investments in mutual funds whether through Systematic investment plan (SIP) or Lumpsum investment can be a great idea.

There are many Asset Management Companies (AMC) which offers various types of schemes depending upon your need and one can invest as low as Rs.100 per month even, and yes the returns are par when you compare it with normal FD or RD.

Having said that there is no guarantee of the returns it can be higher or lower depending on how the stocks have performed.

Investors choose index fund such as nifty 50 index which purchase all the stocks in the same proportion as in a nifty index to invest because of less risks involved, Moreover if you checkout the returns for these indexes since inception, it has been approx. 15% p.a. cagr.


3. Investing In CommoditiesCommodities such as gold and silver has always been a center of attraction not only for investments but as an traditional ethics in India. Which is good at one hand as these have always been used as hedge against inflation.

When the value of currency decreases, commodity can be a safe heaven as its happening currently in 2024.

You may also invest in gold ETFs as well. Having said that if you see the overall average gold returns its been between 5-12% moreover unlike a stock or a bond, it generates no cash flows in the form of profits, dividends, or interest income and time duration required for a commodity to give better return are higher, therefore when you count inflation in your returns it is still less comparing to other class of assets.

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4. Fixed Deposits/Recurring Deposits/Bonds –  These types of investment class are useful for medium to short term moreover the returns are guaranteed. However, if the inflation is higher during the investment tenure than your return on these instruments than there is no point doing so.

Still they are less risky and if you have more amount whether lumpsum or per month to invest than you should consider them. Moreover while investing instead of putting all eggs in one basket you should diversify the investment to other asset class such as mutual funds, equity etc.

SIPs are one way of averaging market volatility, especially in falling markets as the same quantum buys more units of exposure.

This does not mean at all not to invest in FD or RD, but at the same time you should have an eye on inflation and do tactical strategies to overcome it instead of just seeing the value of your investments getting eroded by the inflation.

Other than above methods there are other regular investment methods that you can do considering your retirement goals, few of them are listed below:

  1. PPF – Public Provident Fund
  2. NPS – National Pension Scheme
  3. Kisan Vikas Patra Scheme
  4. Sukanya Samriddhi Yojana Scheme
  5. National Savings Certificate
  6. Post Office MIS Scheme (POMIS)
  7. Equity Link Saving Scheme (ELSS)



The first step you need to take to start saving is setting your savings target. Until and unless you have a set goal, your plan will be directionless. Start by deciding your savings target so that you are financially secure after retirement.

So make sure and planned the things accordingly to be at better position than others, not only for you but for your family and children.

For example as general rule of thumb start savings

In your 20s: Aim to save 25 percent of your overall gross pay

By age 30: Have the equivalent of your annual salary saved

By age 35: Have twice your annual salary saved.

By age 40: Have three times your annual salary saved.

By age 45: Have four times your annual salary saved.

By age 50: Have five times your annual salary saved.

Nobody on this earth have imagined that we might be dealing with a pandemic such as Coronavirus in 2020, people have lost their jobs, business have been hampered drastically, economies throughout world have suffered enormously.

It is not easy to set things up how it was earlier, even if that have not happened, suppose you get fired from your job or you don’t want to do job further, assume you met an accident, do not get me wrong I am not hoping for these bad things to happened to anyone, I am just trying to point out – life is ruthless and at the same time unpredictable.

Saving and investing should be done by everyone at the very beginning of your life and should continue till you know this much would be enough for me to take a retirement or be financially free.

Want to learn about stock market step by step than do read this amazing stock market guide designed specifically for beginners to clear the concepts in easy language.

Incase you are looking for any Home loan or want to calculate the monthly EMI, than do check moneycontain free home loan EMI calculator.

If, you have liked the content please do share it with your friends or on social media, as sharing do bring the good karma. If you have any questions or feedback you can leave them in comment box below.

Note: Please do not take this as any recommendation, to trade or invest. This is just for reference, to make you understand more about Financial goal calculator and its importance, under no circumstances intended to be used or considered as financial or investment advice, a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset.

Please do your own research and make investment. Moneycontain will not be responsible for any of your losses at all. The point made is for educational purpose only. All investments are subject to risks, which should be considered prior to making any investments.

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