In this guide, we’ll help you start to develop positive saving habits and work towards achieving your financial goals. 

Having savings can help you live your best life. There are lots of reasons to save. From basic needs like food, transport and shelter – to things that bring you joy and purpose – like holidays, entertainment and dining out. Savings can support you with any unexpected costs or circumstances throughout life. And when you stop working, the money you’ve saved over time could make a significant impact in helping you fulfil your goals for retirement.

To help you feel motivated to start saving, it’s a good idea to have a clear vision of what you’re saving for. You might have a mix of short and long-term saving goals, and these may change over time.

Here are a few examples of what people save for:

  • Retirement – your pension savings are likely to be one of the most important ways of funding your future after you stop working.
  • A mortgage – many people are keen to get on the property ladder and hope to pay it off before they retire.
  • Rainy day funds – for those unexpected challenges such as losing your job or your boiler breaking down. It’s recommended to have a minimum of three months’ salary in an easy-access savings account to protect you in these circumstances.
  • Supporting your children – if you have or would like to start a family, you might consider saving for childcare costs, university fees, or leaving an inheritance.
  • Dream holidays – if you love travel, you might want to save for a dream holiday or planned sabbatical.
  • A new car – an essential for many in our day-to-day lives.

People who have a concrete vision of their future goals are more likely to have a rainy-day fund, pay off their mortgage and have less debt.

Knowing what you want your life to be like in the future, can improve the financial decisions you take now and in the years to come. Remember to review your saving goals every so often to make sure they still align with your aspirations.

Picture your best life

How much should I save?

How much you should save depends on your individual circumstances and aspirations. For example, if you have debts to pay, you may choose to sacrifice saving as much to prioritise paying off the debt. If you’re saving for a house, you may decide to add more to your savings than you usually would. How much you can and should save will also depend on your salary and how much you have left after bills and other expenses.

Ultimately, it’s up to you to decide, although there are some common recommendations before saving for anything else, that you build up a rainy-day pot of a minimum three months of your salary. This is to cover your bills and expenses in the case of a sudden change of circumstances. Or, to help you cover any unexpected large expenses, such as a boiler breakdown.

Setting financial goals

You’ve thought about what you want to save for, and how much you want to save each month. Next, you might want to consider setting some financial goals to help you stay focused. Financial goals might not just be about how much you save and when, they could also be about how your savings align with your values. Here are some things to think about when setting financial goals.

Write down specific and achievable targets

It’s important to be realistic. Setting yourself unrealistic targets could be disheartening and put you off saving if you don’t achieve your goals. Try writing down specific targets with dates you think you can achieve them by, and mark them on a calendar where you can see it. Seeing your goals and target dates written down could help you to stay motivated with saving.

If you know how much you want to save but aren’t sure how long it will take – try MoneyHelper’s savings calculator.

Align your savings with your values

Did you know your savings could align with your personal values? If Environmental, Social and Governance (ESG) issues – for example, climate change or human rights – are important to you, then aligning your savings with these issues might be a goal that inspires you to save more.

Some of your pension savings may already be invested responsibly. If you’re part of a workplace pension scheme, many providers are offering a commitment to ESG factors in their default funds (the fund your savings are automatically enrolled into). You can check whether your savings are invested responsibly by viewing fund factsheets and key investor documents related to your pension. Sometimes there’s also ‘self-select’ options, where you can choose more ESG-focused funds for your pension if you don’t want to stay on the default fund.

Savings outside of your pension, such as other investment accounts, are less likely to be invested responsibly unless you actively selected a fund that uses an ESG approach.

If you’re new to saving, you might be comfortable with your savings sitting within the default fund for your pension. However, if you’d like to be more active with your investments, we recommend speaking to a financial adviser who can guide you through the process. If you don’t have one, you can find an adviser at MoneyHelper. There may be a charge for this advice.