How much to save a month to reach $2,500 in 10 years

Monthly saving needed to reach $2,500 in 10 years

The higher the return, the less you have to pay in yourself, because growth does part of the work. The table shows four cases from no interest to 6% a year.

Reaching $2,500 over different time frames

Giving yourself longer is the easiest way to lower the monthly amount. At 4% a year, $2,500 needs $17 a month over 10 years, but only $7 a month if you take 20 years.

If you already have some of it saved

A starting balance grows with interest too, so you need to save less each month. The table assumes 4% a year over the same period.

Ways to make the goal easier

• Start with what you can afford: even half the amount gets you $9 a month toward $2,500 sooner than you think.
• Automate the saving on payday so it leaves your account before you can spend it.
• Give yourself more time: stretching the goal by a year lowers the monthly amount.
• Keep goal money in a place where it cannot fall in value if you need it within a few years.

Cash or investments?

For goals within about five years, a cash savings account or a fixed-rate bond keeps the money safe. For longer goals investing can grow the pot faster but values can fall. Retirement accounts such as a 401(k) or IRA have tax advantages, and contribution limits that change every year. Interest and gains in an ordinary taxable account can be taxed.