28th September 2022
It's UK Savings Week, and today we're talking about the second step to healthy savings habits: setting achievable goals.
Now that you have a good idea of your finances, it’s time to start looking at what you’re saving for.
If you’re beginning your savings journey, it’s important to begin creating a financial safety net, often called an emergency fund. While the size of your emergency fund will vary depending on your lifestyle, monthly costs, and income, the rule of thumb is to put away at least three to six months' worth of expenses. This may seem daunting at first, but the idea is to put a small amount away each week or two to build up to that goal. You may also want to consider adjusting the amount based on your bills, family needs, job stability, or other factors.
Once you’ve built up your emergency fund, setting specific savings goals is important. For example, instead of ‘save for the future’, say ‘save £1000 for Christmas’. Using visual reminders is a good way to stay on track - like your dream house as your phone wallpaper, or a picture stuck on your fridge door. Track your progress and feel proud about reaching milestones.
Once saving becomes a habit, it's much easier to keep up. There are some great apps and digital tools out there to help with a ‘little and often' approach to saving.
It’s still important to stay balanced. Everyone deserves a treat now and again, so don't deny yourself all the time. You need to find your own balance that allows you to make progress in saving without having to sacrifice all your spending. As your life changes, so will your goals. There will always be factors that will influence your saving, so staying grounded and in touch with your finances is the best way to stay in control.