How to save money
Achieving your savings goals
Achieving your savings goals
Putting a portion of our earnings aside each month isn't always easy, particularly when there are a whole load of other expenses to deal with, and living costs are constantly on the rise. That's why it's crucial to have a savings goal in place, helping to focus on future plans and keep on the straight and narrow with everyday spending.
If you're unsure where to begin, read on for our guide to saving success.
The first (and possibly most important) step in achieving your goal is deciding how much you need to save. Not only will having a clear figure in mind motivate you, it will also help you to reach your goal faster. Just having a target in place could speed up the saving process.
Once you've got the final sum, grab a pen and paper and write it down, pinning it up somewhere you know you won't be able to miss it as a reminder. You'll then need to break this figure down and work out how much of your salary you can put towards it each month.
Add up all your everyday costs, from groceries and fuel to household necessities and transport, and work out a realistic budget, cutting back on luxuries you could do without. Don't be too strict on yourself – you've still got to live – so set some cash aside for entertainment and the odd treat. You should also account for one-off, irregular payments, like car servicing or birthdays.
Next, work out how many months you'll need to be saving for, so you have a rough idea of when you might hit your target. This is important if you need to save for something by a certain time, like a wedding or a deposit on a house. Once you’ve got into a routine, you’ll feel more in control of your savings and have a bigger picture for your finances.
Setting a savings goal is the easy part. Sticking to it is much harder, which is why it's best to make sure your plan is realistic. If you've worked your budget out carefully and accurately, you shouldn't have too much trouble putting it into practice.
To keep you motivated, it might be handy to add a photo to your mobile phone screen of that dream holiday you’re saving up for or that set of wheels you’re hoping to get. Setting up a monthly transfer to your savings account will also help you to stay on track, tying the money up so you don’t spend it on other things.
If, at the end of the month, you’ve spent less than you thought, you could put the extra money straight into your savings pot, helping you reach your target faster.
Once you’ve told your close family and friends about your savings goal, you’ll find that the challenge feels a lot more real. But this could be key to making sure you stick to your plan. Plus, your loved ones can help encourage you to reach your target.
If you’re saving up with a partner, you’ll be able to support each other in your monthly budgeting and help keep one another on track.