Are you wondering how much your savings will be worth in 5, 10 or 20 years? The good news is that I have a calculator for you that will do just this – the savings growth calculator. Below is a quick guide for how to get the most out it.
To use the savings growth calculator, simply enter the following into the fields below:
Starting Balance: This is the amount of money you already have saved or invested. If you are just starting out, and don’t have any money saved yet, you can still use the simple savings calculator. Just enter $0 in this field.
Monthly Deposit: This is how much you plan to invest or save every month going forward. If you aren’t planning to save or invest anything more, then you just enter $0 in this field. (If you are entering a zero in this field, I encourage you to read my post about becoming a stock market millionaire. By simply setting up a recurring monthly deposit, you can become a millionaire.)
Interest Rate: Enter the interest rate you expect to earn on your investments. For help with this, I use an interest rate of 8%. This is historically what the stock market has averaged. If you are invested mainly in bonds or other fixed income securities, you will want to enter a lower number, closer to 5%.
Compound: This is the frequency your money compounds upon itself. For a savings account, you should set this to monthly. If you are looking at your investments, choose annual. To learn more about compounding and to see why it is such a great thing, read my compound interest post.
Number of Years: This is how long you want your money to grow for. You can enter any number of years you want. I encourage you to play around with the length as you will see the power of compound interest and what effect it has over the long-term.
After you enter all of your information and click the calculate button, you are going to see the future value of your investments or savings.
Disclaimer: Understand that this calculator does not take into account inflation (most online calculators don’t). I like to tell you this upfront so that you know the number from the savings growth calculator is an estimate and not an exact number. It is designed to give you a general idea of what you can expect your savings or investments to be valued at in the future. If you have any questions about this savings growth calculator or with investing or retirement in general, please reach out to me through my contact page.