Updated May 2026
Setting a savings goal can help improve financial stability, build emergency savings and prepare for future purchases such as a car, holiday or house deposit. The key to successful saving is creating a realistic target, automating contributions and tracking progress consistently.
Building a savings goal works best when you break the process into small, realistic steps. Starting with a clear target and creating consistent habits can make saving feel more manageable over time.
An emergency fund helps cover unexpected expenses such as household bills, emergency travel or car repairs. Building emergency savings first can prevent you from dipping into long-term savings goals later on.
Make sure you have an emergency pot set aside before starting a savings goal. This pot shouldn’t be included in the savings goal, and should be used only when an emergency arises.
Naming and visualising a savings goal can make it feel more personal and motivating. Clear goals are often easier to track and stick to over time.
This part is key and can be anything as simple as ‘I want £500 saved by the end of the year.’ There is no limit or minimum amount to set; everyone is different. If you are just starting, setting a super achievable goal is a good way to go, as you’d much rather overachieve than fall short of an unrealistic target. For those experienced in savings, you might be looking at a bigger goal like a new car or house.
Visualising your end point and naming a goal is an essential first step to building a long-term target.
Calculating how much you can realistically save each month helps create a practical savings timeline. Reviewing income and expenses can also highlight areas where spending can be reduced.
The amount you can save each month depends on your income, bills and day-to-day expenses. Reviewing incomings and outgoings helps you build a realistic savings target and timeline.
By now, you should have a clear savings goal, a name for it, and a target date to achieve it. Write these down somewhere visible so you’re reminded of them several times a day.
SMART savings goals are Specific, Measurable, Achievable, Relevant and Time-bound. Using the SMART framework can make financial goals easier to track and more realistic to achieve.
A SMART savings goal is a financial target that is Specific, Measurable, Achievable, Relevant and Time-bound. SMART goals make savings progress easier to track and help people stay motivated over time.
Make sure goals follow the SMART principle. This means the goal is:
Specific: Don’t be vague, set a detailed goal that makes measuring success easy.
Measurable: Make sure you can actually track progress towards the goal. Setting a numerical target here can help.
For example, if your goal is £1,200 in 12 months, you need to save £100 per month or around £25 per week.
Achievable: The goal must be something that you can actually achieve too. You shouldn’t limit yourself, but also shouldn’t set too high a goal that can’t be reached.
Realistic: Make sure the goal is realistic to your circumstances.
Time-Bound: Put a time limit on the goal, to ensure progress doesn’t drag along.
An example of a SMART goal: Save £2,000 for a car deposit in 12 months.
|
Savings Goal |
Monthly Saving Needed |
Timeline |
|
£1,200 emergency fund |
£100/month |
12 months |
|
£3,000 holiday fund |
£250/month |
12 months |
|
£6,000 car deposit |
£250/month |
24 months |
Using a separate savings account can help prevent accidental spending and make savings progress easier to monitor. Different savings accounts suit different financial goals and timelines.
Create a separate account to house your savings. This will make it clearer what has been saved and avoid accidental spending of saved funds. Consider a savings account that pays good interest rates, as these can add a tiny bit of extra cash on top.
Once your savings plan is underway, set up daily, weekly or monthly reminders of your goal and the target time to meet it. A simple spreadsheet, app or even a notebook can help you see progress and stay motivated.
Automatic savings transfers can help build long-term saving habits by moving money into savings before it can be spent elsewhere. Automation also reduces the risk of forgetting monthly contributions.
In the early stages of a savings goal, you’re all in, ready to save wherever possible. However, as time goes on, life gets in the way, and savings goals can drift into the distance very easily. Alongside reminders, automating as much as possible ensures that even if your commitment falters from time to time, the money still enters your savings account. Set up monthly transfers of an affordable amount into your savings (standing order), ensuring that savings become reliable and consistent. Setting up a standing order is super simple. You can do this in your banking app by navigating to your accounts and making a transfer, at which point you can select to repeat this every month. If you don’t have access to a mobile app, you can set up a standing order over the phone or by visiting your local branch.
It can be easy to lose sight of the end goal in the day-to-day, but visualising every so often can bring you back to your plan, block out the noise and focus back on adding much-needed money to your savings.
Reducing spending temptations and removing friction from saving can make financial habits easier to maintain. Small behavioural changes can have a significant impact over time.
Saving is a habit that you can learn. Spending is the same too, and it’s important to make saving easier than spending. Here are a few ways you can do this:
Remove shopping apps from your phone
Use a separate bank account for savings
Avoid linking savings accounts to debit cards
Wait 24–48 hours before impulse purchases
Treat savings like a non-negotiable monthly bill
Paying yourself first means moving money into savings before spending on non-essential purchases. Treating savings like a regular monthly bill can improve consistency.
Many people fail to save because they wait to see what money is left at the end of the month. Instead, move savings immediately after payday and treat them like an essential bill.
Avoiding common savings mistakes, such as setting unrealistic goals or failing to automate savings, can make long-term financial goals easier to maintain.
Setting unrealistic goals
Not automating savings
Dipping into savings too often
Not tracking progress
Forgetting emergency funds
Saving is a great way to make the most of your cash and potentially treat yourself to a luxury purchase or simply alleviate financial stress. Setting the right goal and sticking to it is key. Follow these steps and commit to saving the pennies:
Remember, saving is a marathon, not a sprint. Commit to the small details in the short term, set up a solid foundation, and watch the money pile up over time.
The amount you should save each month depends on your income, expenses and financial goals. A good starting point is working backwards from your target.
For example, if you want to save £1,200 in 12 months, you would need to save:
If that feels unrealistic, consider extending your timeline or starting with a smaller goal. Even saving a small amount consistently can build strong financial habits over time.
Many financial experts recommend aiming to save around 20% of your income where possible, but any regular amount is better than nothing.
A realistic savings goal is one that fits comfortably within your budget and timeframe without causing financial stress.
Good examples include:
The key is to balance ambition with practicality. Setting a goal that is too aggressive can make it harder to stay motivated long term.
Using the SMART method can help:
Yes. Automating your savings is one of the easiest ways to stay consistent.
Setting up a standing order or automatic transfer means money moves into your savings account before you have the chance to spend it elsewhere.
Many people choose to automate savings on payday so it becomes part of their normal monthly routine. Treating savings like a regular bill can make reaching your goal much easier.
Most UK banks allow you to set up recurring transfers through online banking or mobile apps.
The best savings account depends on your goal and how quickly you may need access to your money.
Common options include:
It’s worth comparing interest rates, withdrawal restrictions and account features before choosing a savings account.
Staying motivated is often easier when your goal feels personal and visible.
Helpful ways to stay on track include:
Naming your savings goal
Using visual reminders or progress trackers
Breaking large goals into smaller milestones
Celebrating progress along the way
Reviewing your savings regularly
It’s also important to remember that setbacks happen. Missing a month does not mean you have failed. Long-term consistency matters more than perfection.
For many people, building an emergency fund is a sensible first savings goal.
An emergency fund can help cover unexpected expenses such as:
A common starting target is:
Once emergency savings are in place, you may feel more comfortable saving towards larger goals such as holidays, a new car or a house deposit.
How long it takes to build savings depends on:
For example:
The most important factor is consistency. Small, regular contributions can grow into significant savings over time.