diff --git a/AUTODEV_REPORT.md b/AUTODEV_REPORT.md
new file mode 100644
index 00000000..904910be
--- /dev/null
+++ b/AUTODEV_REPORT.md
@@ -0,0 +1,36 @@
+# AUTODEV Report - Issue #133 Goal-based savings tracking & milestones
+
+## Summary
+Implemented backend savings-goal tracking with milestone progress:
+- Added a new `savings_goals` data model/table.
+- Added authenticated endpoints to list/create goals and add contributions.
+- Added milestone and progress calculations (25/50/75/100%), next milestone, remaining amount, monthly target, and status.
+- Added backend tests and updated API/docs references.
+
+## Changed Files
+- `packages/backend/tests/test_savings_goals.py`
+- `packages/backend/app/models.py`
+- `packages/backend/app/routes/savings.py`
+- `packages/backend/app/routes/__init__.py`
+- `packages/backend/app/db/schema.sql`
+- `packages/backend/app/openapi.yaml`
+- `README.md`
+
+## Test Commands
+1. `sh ./scripts/test-backend.sh tests/test_savings_goals.py` (RED phase before implementation)
+2. `sh ./scripts/test-backend.sh tests/test_savings_goals.py` (GREEN after implementation)
+3. `sh ./scripts/test-backend.sh` (full backend regression suite)
+4. `docker compose run --rm backend sh -lc "flake8 app/routes/savings.py app/models.py tests/test_savings_goals.py"`
+5. `cd packages/backend && ../../.venv/bin/python - <<'PY' ... yaml.safe_load('app/openapi.yaml') ... PY` (OpenAPI YAML parse check)
+
+## Results
+- RED phase: **FAIL as expected** (`404` on missing `/savings/goals` endpoints).
+- New savings tests after implementation: **PASS** (`2 passed`).
+- Full backend suite: **PASS** (`24 passed`).
+- Flake8 on touched backend files: **PASS**.
+- OpenAPI YAML parse check: **PASS**.
+
+## Risks / Follow-ups
+- Existing deployed Postgres databases may require applying updated `schema.sql` (or equivalent migration) before using new savings endpoints.
+- Milestones are currently fixed at 25/50/75/100; custom milestone definitions are not yet supported.
+- No frontend wiring was added in this issue; current budgets UI remains static and does not yet consume the new savings API.
diff --git a/README.md b/README.md
index 49592bff..7f277600 100644
--- a/README.md
+++ b/README.md
@@ -45,7 +45,7 @@ flowchart LR
 
 ## PostgreSQL Schema (DDL)
 See `backend/app/db/schema.sql`. Key tables:
-- users, categories, expenses, bills, reminders
+- users, categories, expenses, bills, reminders, savings_goals
 - ad_impressions, subscription_plans, user_subscriptions
 - refresh_tokens (optional if rotating), audit_logs
 
@@ -66,6 +66,7 @@ OpenAPI: `backend/app/openapi.yaml`
 - Bills: CRUD `/bills`, pay/mark `/bills/{id}/pay`
 - Reminders: CRUD `/reminders`, trigger `/reminders/run`
 - Insights: `/insights/monthly`, `/insights/budget-suggestion`
+- Savings: goal tracking `/savings/goals`, contribute `/savings/goals/{id}/contributions`
 
 ## MVP UI/UX Plan
 - Auth screens: register/login.
diff --git a/packages/backend/app/db/schema.sql b/packages/backend/app/db/schema.sql
index 410189de..091313a1 100644
--- a/packages/backend/app/db/schema.sql
+++ b/packages/backend/app/db/schema.sql
@@ -84,6 +84,19 @@ CREATE INDEX IF NOT EXISTS idx_bills_user_due ON bills(user_id, next_due_date);
 ALTER TABLE bills
   ADD COLUMN IF NOT EXISTS autopay_enabled BOOLEAN NOT NULL DEFAULT FALSE;
 
+CREATE TABLE IF NOT EXISTS savings_goals (
+  id SERIAL PRIMARY KEY,
+  user_id INT NOT NULL REFERENCES users(id) ON DELETE CASCADE,
+  name VARCHAR(200) NOT NULL,
+  target_amount NUMERIC(12,2) NOT NULL,
+  current_amount NUMERIC(12,2) NOT NULL DEFAULT 0,
+  currency VARCHAR(10) NOT NULL DEFAULT 'INR',
+  target_date DATE,
+  created_at TIMESTAMP NOT NULL DEFAULT NOW(),
+  updated_at TIMESTAMP NOT NULL DEFAULT NOW()
+);
+CREATE INDEX IF NOT EXISTS idx_savings_goals_user_target ON savings_goals(user_id, target_date);
+
 CREATE TABLE IF NOT EXISTS reminders (
   id SERIAL PRIMARY KEY,
   user_id INT NOT NULL REFERENCES users(id) ON DELETE CASCADE,
diff --git a/packages/backend/app/models.py b/packages/backend/app/models.py
index 64d44810..453d92ad 100644
--- a/packages/backend/app/models.py
+++ b/packages/backend/app/models.py
@@ -89,6 +89,24 @@ class Bill(db.Model):
     created_at = db.Column(db.DateTime, default=datetime.utcnow, nullable=False)
 
 
+class SavingsGoal(db.Model):
+    __tablename__ = "savings_goals"
+    id = db.Column(db.Integer, primary_key=True)
+    user_id = db.Column(db.Integer, db.ForeignKey("users.id"), nullable=False)
+    name = db.Column(db.String(200), nullable=False)
+    target_amount = db.Column(db.Numeric(12, 2), nullable=False)
+    current_amount = db.Column(db.Numeric(12, 2), default=0, nullable=False)
+    currency = db.Column(db.String(10), default="INR", nullable=False)
+    target_date = db.Column(db.Date, nullable=True)
+    created_at = db.Column(db.DateTime, default=datetime.utcnow, nullable=False)
+    updated_at = db.Column(
+        db.DateTime,
+        default=datetime.utcnow,
+        onupdate=datetime.utcnow,
+        nullable=False,
+    )
+
+
 class Reminder(db.Model):
     __tablename__ = "reminders"
     id = db.Column(db.Integer, primary_key=True)
diff --git a/packages/backend/app/openapi.yaml b/packages/backend/app/openapi.yaml
index 3f8ec3f0..4dc2bd11 100644
--- a/packages/backend/app/openapi.yaml
+++ b/packages/backend/app/openapi.yaml
@@ -12,6 +12,7 @@ tags:
   - name: Bills
   - name: Reminders
   - name: Insights
+  - name: Savings
 paths:
   /auth/register:
     post:
@@ -481,6 +482,86 @@ paths:
             application/json:
               schema: { $ref: '#/components/schemas/Error' }
 
+  /savings/goals:
+    get:
+      summary: List savings goals
+      tags: [Savings]
+      security: [{ bearerAuth: [] }]
+      responses:
+        '200':
+          description: List of savings goals
+          content:
+            application/json:
+              schema:
+                type: array
+                items:
+                  $ref: '#/components/schemas/SavingsGoal'
+    post:
+      summary: Create savings goal
+      tags: [Savings]
+      security: [{ bearerAuth: [] }]
+      requestBody:
+        required: true
+        content:
+          application/json:
+            schema:
+              $ref: '#/components/schemas/NewSavingsGoal'
+            example:
+              name: Emergency Fund
+              target_amount: 10000
+              current_amount: 2500
+              currency: USD
+              target_date: 2026-12-31
+      responses:
+        '201': { description: Created }
+        '400':
+          description: Validation error
+          content:
+            application/json:
+              schema: { $ref: '#/components/schemas/Error' }
+
+  /savings/goals/{goalId}/contributions:
+    post:
+      summary: Add contribution to savings goal
+      tags: [Savings]
+      security: [{ bearerAuth: [] }]
+      parameters:
+        - in: path
+          name: goalId
+          required: true
+          schema: { type: integer }
+      requestBody:
+        required: true
+        content:
+          application/json:
+            schema:
+              $ref: '#/components/schemas/SavingsContribution'
+            example:
+              amount: 500
+      responses:
+        '200':
+          description: Updated goal with milestone progress
+          content:
+            application/json:
+              schema:
+                allOf:
+                  - $ref: '#/components/schemas/SavingsGoal'
+                  - type: object
+                    properties:
+                      newly_reached_milestones:
+                        type: array
+                        items: { type: integer }
+        '400':
+          description: Validation error
+          content:
+            application/json:
+              schema: { $ref: '#/components/schemas/Error' }
+        '404':
+          description: Goal not found
+          content:
+            application/json:
+              schema: { $ref: '#/components/schemas/Error' }
+
 components:
   securitySchemes:
     bearerAuth:
@@ -587,3 +668,44 @@ components:
         message: { type: string }
         send_at: { type: string, format: date-time }
         channel: { type: string, enum: [email, whatsapp], default: email }
+    SavingsGoal:
+      type: object
+      properties:
+        id: { type: integer }
+        name: { type: string }
+        target_amount: { type: number, format: float }
+        current_amount: { type: number, format: float }
+        remaining_amount: { type: number, format: float }
+        progress_pct: { type: number, format: float }
+        status: { type: string, enum: [ahead, on-track, behind, completed] }
+        monthly_target: { type: number, format: float }
+        currency: { type: string }
+        target_date: { type: string, format: date, nullable: true }
+        milestones:
+          type: array
+          items:
+            type: object
+            properties:
+              percentage: { type: integer }
+              amount: { type: number, format: float }
+              reached: { type: boolean }
+        next_milestone:
+          type: object
+          nullable: true
+          properties:
+            percentage: { type: integer }
+            amount: { type: number, format: float }
+    NewSavingsGoal:
+      type: object
+      required: [name, target_amount]
+      properties:
+        name: { type: string }
+        target_amount: { type: number, format: float }
+        current_amount: { type: number, format: float, default: 0 }
+        currency: { type: string, default: INR }
+        target_date: { type: string, format: date, nullable: true }
+    SavingsContribution:
+      type: object
+      required: [amount]
+      properties:
+        amount: { type: number, format: float }
diff --git a/packages/backend/app/routes/__init__.py b/packages/backend/app/routes/__init__.py
index f13b0f89..0a92db36 100644
--- a/packages/backend/app/routes/__init__.py
+++ b/packages/backend/app/routes/__init__.py
@@ -7,6 +7,7 @@
 from .categories import bp as categories_bp
 from .docs import bp as docs_bp
 from .dashboard import bp as dashboard_bp
+from .savings import bp as savings_bp
 
 
 def register_routes(app: Flask):
@@ -18,3 +19,4 @@ def register_routes(app: Flask):
     app.register_blueprint(categories_bp, url_prefix="/categories")
     app.register_blueprint(docs_bp, url_prefix="/docs")
     app.register_blueprint(dashboard_bp, url_prefix="/dashboard")
+    app.register_blueprint(savings_bp, url_prefix="/savings")
diff --git a/packages/backend/app/routes/savings.py b/packages/backend/app/routes/savings.py
new file mode 100644
index 00000000..251d1d69
--- /dev/null
+++ b/packages/backend/app/routes/savings.py
@@ -0,0 +1,202 @@
+from datetime import date, datetime
+from decimal import Decimal, InvalidOperation
+import math
+
+from flask import Blueprint, jsonify, request
+from flask_jwt_extended import get_jwt_identity, jwt_required
+
+from ..extensions import db
+from ..models import SavingsGoal, User
+
+bp = Blueprint("savings", __name__)
+MILESTONE_PERCENTAGES = (25, 50, 75, 100)
+
+
+@bp.get("/goals")
+@jwt_required()
+def list_goals():
+    uid = int(get_jwt_identity())
+    items = (
+        db.session.query(SavingsGoal)
+        .filter(SavingsGoal.user_id == uid)
+        .order_by(SavingsGoal.created_at.desc(), SavingsGoal.id.desc())
+        .all()
+    )
+    return jsonify([_serialize_goal(goal) for goal in items])
+
+
+@bp.post("/goals")
+@jwt_required()
+def create_goal():
+    uid = int(get_jwt_identity())
+    data = request.get_json() or {}
+
+    name = str(data.get("name") or "").strip()
+    if not name:
+        return jsonify(error="name is required"), 400
+
+    target_amount = _parse_decimal(data.get("target_amount"))
+    if target_amount is None or target_amount <= 0:
+        return jsonify(error="target_amount must be greater than 0"), 400
+
+    current_amount = _parse_decimal(data.get("current_amount"), default=Decimal("0"))
+    if current_amount is None or current_amount < 0:
+        return jsonify(error="current_amount must be greater than or equal to 0"), 400
+
+    target_date = _parse_target_date(data.get("target_date"))
+    if data.get("target_date") and target_date is None:
+        return jsonify(error="target_date must be a valid ISO date"), 400
+
+    user = db.session.get(User, uid)
+    goal = SavingsGoal(
+        user_id=uid,
+        name=name,
+        target_amount=target_amount,
+        current_amount=current_amount,
+        currency=(data.get("currency") or (user.preferred_currency if user else "INR")),
+        target_date=target_date,
+    )
+    db.session.add(goal)
+    db.session.commit()
+    return jsonify(id=goal.id), 201
+
+
+@bp.post("/goals/<int:goal_id>/contributions")
+@jwt_required()
+def add_contribution(goal_id: int):
+    uid = int(get_jwt_identity())
+    goal = db.session.get(SavingsGoal, goal_id)
+    if not goal or goal.user_id != uid:
+        return jsonify(error="not found"), 404
+
+    data = request.get_json() or {}
+    amount = _parse_decimal(data.get("amount"))
+    if amount is None or amount <= 0:
+        return jsonify(error="amount must be greater than 0"), 400
+
+    previous_progress = _progress_pct(goal.current_amount, goal.target_amount)
+    goal.current_amount = (_to_decimal(goal.current_amount) + amount).quantize(
+        Decimal("0.01")
+    )
+    goal.updated_at = datetime.utcnow()
+    db.session.commit()
+
+    payload = _serialize_goal(goal)
+    payload["newly_reached_milestones"] = _newly_reached_milestones(
+        previous_progress, payload["progress_pct"]
+    )
+    return jsonify(payload)
+
+
+def _parse_decimal(value, default=None):
+    if value is None:
+        return default
+    parsed = _to_decimal(value)
+    if parsed is None:
+        return None
+    return parsed.quantize(Decimal("0.01"))
+
+
+def _to_decimal(value) -> Decimal | None:
+    try:
+        return Decimal(str(value))
+    except (InvalidOperation, TypeError, ValueError):
+        return None
+
+
+def _parse_target_date(raw_value):
+    if raw_value in (None, ""):
+        return None
+    if isinstance(raw_value, date):
+        return raw_value
+    try:
+        return date.fromisoformat(str(raw_value))
+    except ValueError:
+        return None
+
+
+def _serialize_goal(goal: SavingsGoal) -> dict:
+    target_amount = float(goal.target_amount or 0)
+    current_amount = float(goal.current_amount or 0)
+    progress_pct = _progress_pct(goal.current_amount, goal.target_amount)
+    remaining_amount = round(max(target_amount - current_amount, 0), 2)
+    milestones, next_milestone = _build_milestones(target_amount, current_amount)
+
+    return {
+        "id": goal.id,
+        "name": goal.name,
+        "target_amount": target_amount,
+        "current_amount": current_amount,
+        "currency": goal.currency,
+        "target_date": goal.target_date.isoformat() if goal.target_date else None,
+        "progress_pct": progress_pct,
+        "remaining_amount": remaining_amount,
+        "status": _goal_status(goal, progress_pct),
+        "monthly_target": _monthly_target(remaining_amount, goal.target_date),
+        "milestones": milestones,
+        "next_milestone": next_milestone,
+    }
+
+
+def _progress_pct(current_amount, target_amount) -> float:
+    target = _to_decimal(target_amount) or Decimal("0")
+    if target <= 0:
+        return 0.0
+    current = _to_decimal(current_amount) or Decimal("0")
+    pct = (current / target) * Decimal("100")
+    return round(float(min(pct, Decimal("100"))), 2)
+
+
+def _build_milestones(target_amount: float, current_amount: float):
+    milestones = []
+    next_milestone = None
+    for percentage in MILESTONE_PERCENTAGES:
+        amount = round((target_amount * percentage) / 100, 2)
+        reached = current_amount >= amount
+        milestone = {"percentage": percentage, "amount": amount, "reached": reached}
+        milestones.append(milestone)
+        if not reached and next_milestone is None:
+            next_milestone = {"percentage": percentage, "amount": amount}
+    return milestones, next_milestone
+
+
+def _goal_status(goal: SavingsGoal, progress_pct: float) -> str:
+    if progress_pct >= 100:
+        return "completed"
+
+    if not goal.target_date:
+        return "on-track"
+
+    today = date.today()
+    if goal.target_date <= today:
+        return "behind"
+
+    created_day = goal.created_at.date() if goal.created_at else today
+    total_days = max((goal.target_date - created_day).days, 1)
+    elapsed_days = min(max((today - created_day).days, 0), total_days)
+    expected_pct = (elapsed_days / total_days) * 100
+    if progress_pct >= expected_pct + 5:
+        return "ahead"
+    if progress_pct + 5 >= expected_pct:
+        return "on-track"
+    return "behind"
+
+
+def _monthly_target(remaining_amount: float, target_date_value: date | None) -> float:
+    if remaining_amount <= 0:
+        return 0.0
+    if not target_date_value:
+        return 0.0
+    days_remaining = (target_date_value - date.today()).days
+    if days_remaining <= 0:
+        return round(remaining_amount, 2)
+    months_remaining = max(math.ceil(days_remaining / 30), 1)
+    return round(remaining_amount / months_remaining, 2)
+
+
+def _newly_reached_milestones(previous_progress: float, current_progress: float):
+    reached = []
+    for percentage in MILESTONE_PERCENTAGES:
+        if previous_progress < percentage <= current_progress:
+            reached.append(percentage)
+    return reached
diff --git a/packages/backend/tests/test_savings_goals.py b/packages/backend/tests/test_savings_goals.py
new file mode 100644
index 00000000..a956e358
--- /dev/null
+++ b/packages/backend/tests/test_savings_goals.py
@@ -0,0 +1,78 @@
+from datetime import date, timedelta
+
+
+def test_savings_goal_create_list_and_milestone_progress(client, auth_header):
+    r = client.get("/savings/goals", headers=auth_header)
+    assert r.status_code == 200
+    assert r.get_json() == []
+
+    payload = {
+        "name": "Emergency Fund",
+        "target_amount": 1000,
+        "current_amount": 200,
+        "target_date": (date.today() + timedelta(days=180)).isoformat(),
+    }
+    r = client.post("/savings/goals", json=payload, headers=auth_header)
+    assert r.status_code == 201
+    goal_id = r.get_json()["id"]
+
+    r = client.get("/savings/goals", headers=auth_header)
+    assert r.status_code == 200
+    items = r.get_json()
+    assert len(items) == 1
+    goal = items[0]
+    assert goal["id"] == goal_id
+    assert goal["name"] == "Emergency Fund"
+    assert goal["progress_pct"] == 20.0
+    assert goal["remaining_amount"] == 800.0
+    assert goal["status"] in ("on-track", "ahead", "behind")
+    assert goal["next_milestone"]["percentage"] == 25
+
+    r = client.post(
+        f"/savings/goals/{goal_id}/contributions",
+        json={"amount": 60},
+        headers=auth_header,
+    )
+    assert r.status_code == 200
+    updated = r.get_json()
+    assert updated["current_amount"] == 260.0
+    assert updated["progress_pct"] == 26.0
+    assert updated["newly_reached_milestones"] == [25]
+    assert updated["next_milestone"]["percentage"] == 50
+
+
+def test_savings_goal_validations_and_currency_default(client, auth_header):
+    r = client.patch(
+        "/auth/me", json={"preferred_currency": "INR"}, headers=auth_header
+    )
+    assert r.status_code == 200
+
+    r = client.post(
+        "/savings/goals",
+        json={"name": "Trip", "target_amount": 5000},
+        headers=auth_header,
+    )
+    assert r.status_code == 201
+    goal_id = r.get_json()["id"]
+
+    r = client.get("/savings/goals", headers=auth_header)
+    assert r.status_code == 200
+    created = next((goal for goal in r.get_json() if goal["id"] == goal_id), None)
+    assert created is not None
+    assert created["currency"] == "INR"
+
+    r = client.post(
+        f"/savings/goals/{goal_id}/contributions",
+        json={"amount": 0},
+        headers=auth_header,
+    )
+    assert r.status_code == 400
+    assert "amount" in r.get_json()["error"]
+
+    r = client.post(
+        "/savings/goals",
+        json={"name": "Invalid Goal", "target_amount": -10},
+        headers=auth_header,
+    )
+    assert r.status_code == 400
+    assert "target_amount" in r.get_json()["error"]