The first and most important step is to clearly define what you are saving for. Be specific about both the amount you need and the purpose of the savings. Having a well-defined goal will help you stay focused and make it easier to create a realistic savings plan.

• What are you saving for?
• How much do you need to reach your goal?

• Property deposit: - £30,000
  This is a common goal for first-time homebuyers. The average price of a property in the UK is around £300,000, so a 10% deposit typically amounts to approximately £30,000. Depending on where you live, this amount may vary, so consider adjusting based on the average house prices in your area.
• Wedding: - £10,000
  The cost of a wedding can vary significantly, but the average cost in the UK is around £18,000 to £20,000. Many couples opt for smaller, more intimate ceremonies and aim to spend closer to £10,000.
• School fees: - £120,000
  Private school fees can be substantial. On average, yearly fees for private schools in the UK range from £12,000 to £18,000 per year. Over several years of education, these costs can add up to £120,000 or more.

Calculating how long it will take to reach your financial goal depends primarily on the rate of return you can expect from your chosen financial vehicle. The higher your rate of return, the less time it will take to accumulate the necessary funds. However, the predictability of this growth varies depending on the financial product you choose.

The rate of return tends to be more stable and predictable for savings accounts, making it easier to estimate how long it will take to meet your goal. Savings accounts typically offer returns in the range of 3% to 4% annually.

Fixed-rate savings accounts guarantee the same return over a set period, meaning you can predict your timeline with relative certainty. Variable-rate accounts offer the potential for the rate to change over time, which means the time horizon for reaching your goal could shift if the rate increases or decreases during the saving period.

Investing, on the other hand, offers the potential for higher returns, but with less predictability. Over a long period, investments like stocks, bonds, or mutual funds tend to generate higher returns, typically averaging between 5% and 8% annually.

However, these returns can fluctuate based on market performance, meaning your investments may grow faster or slower than anticipated. This variability makes investing more suitable for long-term goals, typically those 5 years or more in the future. The longer the timeframe, the more likely your investments will have time to recover from any market dips and still generate a solid return, shortening the overall time to reach your goal.

By this point, you've defined your goal, decided how much you can afford to contribute each month, and estimated your expected rate of return. Now it's time to run the numbers and figure out how long it will take to reach your target.

If you want to figure out how much to save each month to hit your target instead, check out our dedicated monthly amount needed calculator. It works in reverse and helps you find the monthly contribution needed to stay on track. But if you know how much you can afford to save, the formula for calculating time is below.

Formula: The formula for calculating the time it'll take to reach your goal is:

To simplify things we've developed a calculator below. If you want more control, try our stand alone time to target calculator.

When setting your goal, it's important to consider inflation as this will reduce the purchasing power of your money over time.

Inflation typically ranges from 2% to 3% per year, depending on the country and economic conditions. If you don't account for it, you may fall short of your goal, even if you hit your nominal savings target.

Formula: To adjust an amount for the effects of inflation, use the following formula:

Use our calculator to understand the effect inflation will have on your savings goal. As prices rise over time, the purchasing power of money falls, which means the same amount of money will buy less in the future than it does today.

If you want to save for the future, and you want that to have the same value it has today, you'll need to adjust for inflation. This tool helps you do that, so you can plan more accurately for the future.

For more features, check out our full future value calculator.

A savings plan isn't something you set and forget. Regular reviews help ensure you stay on track, adapt to changes, and make the most of your savings over time.

Before you start saving, ensure your plan aligns with your goal, financial situation, and time horizon. The savings vehicle you choose should match both your timeframe and risk tolerance.

Regularly reviewing your savings progress helps you stay on course. Changes in income, expenses, or interest rates may require adjustments to keep you on track.

• Check your progress: - Set reminders to review your savings at least once a year. Ensure your balance is growing as expected and adjust if needed.
• Increase contributions when possible: - Boosting your savings after a pay rise or cutting unnecessary expenses can shorten your timeline.
• Reassess your target: - Your goal may change over time. If costs rise due to inflation or shifting priorities, update your savings target accordingly.
• Optimise your savings account: - Compare interest rates periodically. Switching to a higher-yield account can improve your returns with minimal effort.

A flexible savings strategy keeps you in control, helping you adapt to financial changes while staying focused on your long-term goals.