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Setting savings goals

Whether it's for something big, like a home or your children's education, or simply for your peace of mind, having a specific goal to save towards can help you stay focused and give you a clear sense of purpose.

Studies into savings behaviour indicate that people who set savings goals save more, and reach their goals faster, than those who don't. Many of us instinctively want to live in the moment, which makes saving money hard, but it is possible to overcome this with regular prompts or nudges.

So why not set some savings goals for yourself? You could start by asking yourself some of these questions:

  • What do you want or need to buy in the next 12 months?
  • What breaks or holidays do you plan to take?
  • What high interest debts would you like to clear?
  • What are your medium term plans (e.g. saving for a home deposit)?
  • What savings might you need for your long term future (e.g. your retirement)?
  • What help would you like to be able to provide for your loved ones?

Once you've turned your answers into a savings plan, you'll need to keep focused on it.

Here are some ways to do that:

What you should do: How you can do it:
Write your goals down Place them somewhere visible like the fridge door, record them in a savings app, or make a note in your phone. Make sure you see them often so you're reminded of them regularly.
Break big savings goals down If you don't seem to be getting close to a big goal, like saving for a down payment on a house, it can be tempting to give up. Instead, break down these big savings goals into smaller targets. This will make it easier to see the progress you're making and keep you motivated.
Involve friends or family Share your savings goal and ask them to check your progress on a regular basis. Better still, make it competitive and encourage them to set their own savings goals. Sharing goals can make you feel more accountable for them, and encourage you to keep going.
Consider timescales

Think about your savings goals in terms of short term (a holiday or new car), medium term (a house deposit) and long term (pay off your mortgage or save towards a retirement fund).

By separating your goals in this way, you can enjoy the gratification of reaching short term goals, while still having plans in place to reach your longer term goals.

Here are some ways to do that:

What you should do: Write your goals down Write your goals down
How you can do it: Place them somewhere visible like the fridge door, record them in a savings app, or make a note in your phone. Make sure you see them often so you're reminded of them regularly. Place them somewhere visible like the fridge door, record them in a savings app, or make a note in your phone. Make sure you see them often so you're reminded of them regularly.
What you should do: Break big savings goals down Break big savings goals down
How you can do it: If you don't seem to be getting close to a big goal, like saving for a down payment on a house, it can be tempting to give up. Instead, break down these big savings goals into smaller targets. This will make it easier to see the progress you're making and keep you motivated. If you don't seem to be getting close to a big goal, like saving for a down payment on a house, it can be tempting to give up. Instead, break down these big savings goals into smaller targets. This will make it easier to see the progress you're making and keep you motivated.
What you should do: Involve friends or family Involve friends or family
How you can do it: Share your savings goal and ask them to check your progress on a regular basis. Better still, make it competitive and encourage them to set their own savings goals. Sharing goals can make you feel more accountable for them, and encourage you to keep going. Share your savings goal and ask them to check your progress on a regular basis. Better still, make it competitive and encourage them to set their own savings goals. Sharing goals can make you feel more accountable for them, and encourage you to keep going.
What you should do: Consider timescales Consider timescales
How you can do it:

Think about your savings goals in terms of short term (a holiday or new car), medium term (a house deposit) and long term (pay off your mortgage or save towards a retirement fund).

By separating your goals in this way, you can enjoy the gratification of reaching short term goals, while still having plans in place to reach your longer term goals.

Think about your savings goals in terms of short term (a holiday or new car), medium term (a house deposit) and long term (pay off your mortgage or save towards a retirement fund).

By separating your goals in this way, you can enjoy the gratification of reaching short term goals, while still having plans in place to reach your longer term goals.

Get started with disciplined investments to meet your financial goals.

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