Personal Savings Calulator

Houses, cars, boats, overseas trips, high priced consumer items, all the stuff you aways wanted you can have - if you have the money.

Consider this. Every time you purchase something, you transfer some of your wealth to someone else - several people in fact. The manufacturer, its suppliers, the retailer, distributor, the truckie who delivered it and many others in the supply chain. They all clip the ticket along the way. That's OK - nothing is for free and they all gotta make a buck somehow. You also pay the IRD (the taxman) GST and quite possibly other less obvious taxes.

Also consider that if you BORROW to purchase something, the amount of wealth you transfer to others is even greater. Like the bank's shareholders and employees, the bank's deposit customers, and yes, the TAXMAN AGAIN! Part of your interest payments go to the IRD as withholding tax before interest is paid to the bank's depositors.

Its up to you to decide, "HOW MUCH OF YOUR WEALTH DO YOU WANT TO PAY TO SOMEONE ELSE?"

If you are like most people and haven't had the good fortune to have inherited wealth or made a quick dollar out of a dot com or other venture, the CHEAPEST way of getting something you want is to save for it first - especially when inflation is relatively low.

Committing to saving a regular amount of money from your income is the first step towards a lifetime of financial security. Check out the calculator below and see how the power of compound returns can work for you.

This calculator is more suitable for shorter term savings goals - generally less than 7 to 8 years. For long term retirement planning, use the MoneyOnLine Retirement Calculator.

How much money total do you want to save? $  
How much do you have saved already? $  
What rate of return can your money earn? See below for examples. Reduce these rates to allow for taxation. % 
When do you want to reach your savings goal?  yrs
 mths
 
Total amount you need to save each month to reach your goal $  
* NOTE:  A negative figure in this box means you will reach your savings target before 
the stated period. Reduce the number of years or the return to get a sensible answer.
Possible rates of return

The rate of return you receive depends on where you save or invest your money and your savings goal. Below are examples of rates of return you could receive from different savings vehicles for different savings goals. These rates of return are estimates. For the current actual rate of return your money can earn, contact the financial institution (bank, credit union, mutual fund company, etc) where you plan to save or invest your money. Remember, rates of return are not guaranteed and will go up and down with changes in the stock market, interest rates, etc.

Investments with higher rates of return also have higher risk. This means the value of your investment will fluctuate more. The possibility that you might lose money is higher.

If you need the money in less than two years, it is more appropriate to use low risk deposits, cash management funds, and possibly high quality mortgage unit trusts. (Provided the fee structure is low and you can access your money at the time you need it.)

Examples.

(These are historical averages, before tax)

Short Term Savings (less than a 2 year period)

Banks, finance companies, call accounts use 2% to 3% pa

Intermediate Term Savings (2 to 3 years)

Finance companies, mortgage unit trusts, bonds and other fixed interest investments
(preferably compounding types). 4% to 7% pa

Long Term Savings (3 years plus)

Sharemarket Unit Trusts (International & local) 8 -10%pa

  • Direct Share Investment 8 -10%
  • Secured Debentures 6 - 8%pa
  • Property Trusts 8 - 10% pa
  • Bonds 5 - 8% pa

These are just a few of the savings and investment vehicles available to you. The MoneyOnLine website provides a very large range of investment opportunities for you to choose from.

The rates of return used in this worksheet are estimates based on the past performance of the listed savings and investment types. These are intended to serve as examples and is not a complete list. MoneyOnLine Limited does not guarantee that any rate of return listed here will eventuate nor do we recommend any particular investment vehicle over another. This worksheet does not account for inflation or taxes.