How to set a savings goal

Money Advice Service

People who set a money savings goal save faster than those who don’t! So if you really want to get that deposit for a home, or save enough for a dream holiday, name your goal, work out how much you can save each month and get started. Then sit back and watch your money start to grow!

Step 1 – Name your goal

Did you know?

It’s official – people who set their savings goal save faster and up to £550 a year more than people who don’t.

Source: NS&I

What do you want to save for? If you name your goal you’ll reach it faster. If you’re new to saving, try starting with a small goal.

Even if you’re just saving for a rainy day, you’re more likely to succeed if you have a goal amount in mind.

Grab a pen and write down your goal.

Step 2 – Work out how much to save each month

It depends on the price of your goal, how much spare cash you have at the end of each month, and how soon you want to reach your goal.

Say you were saving for a £400 laptop. You could save £100 a month for 4 months, or £50 a month for 8 months.

It’s a balance between what you can afford and how long you want to save for.

Use the Savings calculator to see how long it’ll take you to reach your goal. 

Step 3 – Set up a standing order

Top tip

Give your account a name that inspires you to save – like ‘USA road trip,’ ‘Gemma and Mark’s wedding’ or ‘Our first home’. Research shows that you’ll save quicker!

Strike while the iron’s hot! Open a straightforward instant access savings account. It might be easiest to do this with your own bank.

Set up a regular payment today to transfer the amount you want to save into your savings account each month.

Find out more about Direct debits and standing orders

What to do

  • Open a savings account if you don’t already have one – go online or pop into your bank.
  • Set up a regular payment into your savings account every month. Use our downloadable template to send a standing order instruction to your bank.

Step 4 – Shop around to find the best place for your savings

Once you’ve got started give your savings chance to grow faster by spending some time to find the right home for them.

The best home depends on how much time you have to reach your goal, and how much risk you’re willing to take.

  • For a short-term goal (up to 5 years) you want a saving product like a savings account, term deposit or a cash ISA.
  • For a medium term goal (5-10 years) use a savings product, or consider investments depending on your goals and risk appetite.
  • For a longer-term goal you should consider investments like shares, bonds or funds that tend to provide protection from inflation over the long term.

Comparison websites are a good starting point for anyone trying to find a savings account tailored to their needs.

We recommend the following websites for comparing savings accounts:

Remember:

  • Comparison websites won’t all give you the same results, so make sure you use more than one site before making a decision.
  • It is also important to do some research into the type of product and features you need before making a purchase or changing supplier.
  • Find out more in our guide to comparison sites.

What to do next

This article is provided by the Money Advice Service.

Links with an * by them are affiliate links which help Rest Less stay free to use as they can result in a payment or benefit to us. You can read more on how we make money here.
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