Saving “what is left at the end of the month” rarely works, because usually nothing is left. A savings goal changes that. It gives your money a job, a number and a date. This guide shows a simple 5-step plan with a worked example.
This article is the reading companion to the Set a Savings Goal lesson in our free Money course. Read, watch or listen here, then practise in the interactive lesson.
In this article
Why a goal beats “save what is left”
A vague wish like “I should save more” is easy to ignore. A clear goal like “600 for a laptop in 10 months” is easy to act on. You know what you are saving for, how much and by when, so you can tell whether you are on track.
Step 1: Name the goal
Write down what you are saving for and why it matters to you. A phone, a trip, a course, a first deposit on a flat, or a buffer for surprises. The more it matters, the easier it is to keep going when you would rather spend.
Step 2: Put a number and a date on it
Divide the target by the number of months. This is your monthly amount.
Example (made-up numbers): you want 600 for a laptop in 10 months. 600 divided by 10 is 60 a month, or about 15 a week. If 60 is too much, give yourself 15 months instead and save 40 a month. A longer date is better than giving up.
Step 3: Pick short, medium or long term
- Short term (under a year): a phone, a trip, a gift.
- Medium term (one to five years): a course, a car, moving abroad.
- Long term (five years or more): a home deposit or retirement.
Start with one short-term goal. A first quick win builds the habit for bigger ones.
Step 4: Automate it
Set up an automatic transfer for the day you get paid. This is called paying yourself first. The money moves before you can spend it, so you do not need willpower every month. Keep it in a separate savings account so it is out of sight.
Step 5: Track progress and celebrate milestones
Mark 25, 50 and 75 percent on a chart or in an app. Each milestone is a reason to feel good about the plan. When you reach the goal, spend the money on what you saved for, and enjoy it.
When life gets in the way
Unexpected costs will happen. If you miss a month, do not quit. Adjust the amount or the date and carry on. It also helps to build a small emergency buffer early, so one surprise bill does not wipe out your goal. Many experts suggest building towards a few months of essential costs over time, but a first buffer of even one month is a good start.
Not sure what counts as essential? Read needs vs. wants, then see how a goal fits into a budget.
Watch and learn
Two short videos and two longer ones on setting and reaching savings goals.
Frequently asked questions
How much should I save each month?
There is no single right number. Work backwards from your goal: divide the target by the months you have. Many people aim for about 20 percent of income when they can, but even a small automatic amount builds the habit.
What is a good first savings goal?
A short-term goal you care about, such as a phone, a trip or a small emergency buffer. A quick win makes the next goal easier.
Should I save or pay off debt first?
It depends on the interest rate and your situation. Debts with high interest are often paid down first, while a small buffer protects you from new debt. For a personal answer, talk to a qualified adviser or a free debt-advice service.
Where should I keep my savings?
Many people use a separate savings account so the money is out of sight. Compare accounts and check how deposits are protected in your country.
Keep learning
Educational information, not financial advice. Examples use made-up numbers; check the rules and products that apply where you live.
