How much to set aside to meet your financial goals
Savings Goal Calculator
When saving for a big financial goal, it’s important to understand the relationship between how much you save each month and how long it will take to reach your goal. At First Foundation Bank, we’re here to help you meet your financial needs. Whether you’re saving for a near-term goal such as a house down payment or a long-term goal such as a child’s college education, our savings calculator can help.
Budgeting for your next savings goal
The key to reaching any savings goal is committing to saving regularly. Even if you’re only saving a small amount each month, those contributions add up—especially when you consider how interest can compound over time. Our savings goal calculator helps you see how you can reach your goal, and how interest factors into the growth of your savings.
Calculating your savings goal
The amount of money that you’ll need to set aside to accomplish your goals will vary, so carefully consider your needs. Simple goals, such as a future vacation, may have a fixed price that’s easy to calculate based on the price of flights and hotel stays.
Larger goals may require more flexibility. If you’re saving for a down payment on a house, you may aim for a ballpark figure based on the average price of homes in your area, even if you can’t be sure exactly how much you’ll need to put down when the time comes to buy.
Understanding the calculator results
Our calculator’s results tell you how much money you need to save each month to meet your goal over a set period of time. The calculator accounts for any money you’ve already saved, as well as interest your money can earn. To keep things simple, the calculator assumes you’ll save the same amount every month—which is easy to set up through automated transfers.
What is the interest rate and how does it work?
Your interest rate is the amount that First Foundation pays you to keep your savings on deposit with us. At First Foundation Bank, our online savings account currently earns an annual percentage yield (APY) of 1.0%—20 times the national average*. Interest on First Foundation savings accounts compounds daily, allowing you to earn interest on your interest so your savings can grow faster.
Savings goal calculator glossary
Savings goal: The amount of money you are aiming to save based on the actual cost of a specific purchase, or the estimated price of a larger goal, such as a down payment on a house or buying a car.
Timeframe: Some savings goals have specific timelines, such as paying for a child’s college education or retiring at a certain age. For others, the timeline may not be fixed. For example, you may be planning to buy a house sometime in the next several years. Either way, a longer timeline means you’ll have to budget less each month to meet your goal, and compounding interest will help your savings work harder for you.
Current savings: Your current savings is the amount you already have set aside toward your goal. This money can start earning interest now. Even a small amount of savings can help you build momentum toward your larger goal. But it’s also okay if you’re starting from zero. Every small step toward your goal helps.
How much interest will you earn?
The money in your savings account earns interest every day. And through the process of daily compounding, your interest earns interest, thus accelerating your savings. First Foundation Bank online savings customers earn 1.0% interest on their savings, which compounds daily. So $50,000 invested for five years will grow to $52,563.53 by the end of the period. When five years are up, you’ll have made over $2,500 without any additional savings contributed.
Our savings goal calculator keeps saving simple, and our online banking tools help you track your progress every step of the way. Let us know how we can help you meet your goals today.
*National Average from FDIC Weekly National Rates and Rate Caps and is accurate as of 9/14/20