Considering that they have $10,000 already saved (half of which was provided by Joan’s parents as a wedding gift), how much money do they need to save each month to reach their goal? 

Ms6014 m2a2 – the time value of money – preparing for home ownership

If the couple wants to set aside $30,000 to cover their future expenses, then they will need to add another $20,000. In order to achieve their $30,000 goal, the couple would have to set aside an extra $1,666.67 a month (20% divided by 12 months). The amount is achievable by those who are committed to a budget and take conscious decisions about their finances, such as cutting down on spending and reducing unnecessary expenses.

After paying for living expenses, and all other monthly payments that may be due, the couple should also consider their disposable income. This can differ greatly depending on circumstances. The couple should then aim to save any money left over, so that saving becomes second-nature.

Other than setting money aside each month from the regular salary, there are also many creative ways that a couple can increase their savings. They could do this by leveraging passive sources of income like investment properties or rental property. Last but not least, they can reach their goal faster by putting aside any windfalls like birthday presents or bonuses.

The couple can achieve their goal of an extra $20k in a reasonable amount time if they are disciplined and invest early.