Savings-rate comparison

Your savings rate is the one thing you can reliably control. Compare two rates here and see the difference at the end.

How this is calculated

What it calculates

Two monthly contributions side by side, with the same return and the same time horizon. It shows how much the size of the monthly amount alone makes a difference.

Your inputs

Rate A and rate B: the two monthly amounts being compared. There is no starting amount.
Annual return: the same for both, as a constant assumption.
Time horizon: the same for both.

The calculation

Each rate uses the same savings-plan formula as the compound interest calculator, with the monthly rate i = return ÷ 12 ÷ 100 and n = years × 12 months, paid at the start of each month:

Result = rate × ((1 + i)ⁿ − 1) ÷ i × (1 + i)
Difference = result B − result A

The rate is a simple multiplier in front of the brackets, so three times the rate gives exactly three times the result. Assumptions: no costs, no taxes, no inflation.

What the result means

The difference comes entirely from what you pay in, plus the compounding on that extra money. The return is identical in both cases. The monthly amount is the lever you actually control.

Example

Default values: €100 versus €300 a month, 6% a year, 25 years. Rate A comes to about €69,646 (€30,000 paid in), rate B to about €208,938 (€90,000 paid in). Difference: €139,292.

Both scenarios assume the same return. The whole difference comes from what you contribute.

The full explanation is in the lesson What's left at the end of the month.

Frequently asked questions

Which variable in a savings plan can you reliably control?

The savings rate. The return you can only estimate, not determine.

Why do many people miscalculate their expenses?

Because items that come only once a year, like insurance, holidays or repairs, are missing when you think month by month.