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A key part of personal finance is being able to make a savings plan and stick to it. Whether it is saving for university, some dance lessons or a new set of DJ decks you need to be confident in how to find a goal and take steps to achieve it.

Let’s imagine you are saving money to move out of your parents place into somewhere new. This is not a straight-forward thing, it takes time to grow towards a goal, but here are some steps you can take to make a savings plan a little easier.

STEP 1: Set a Target Amount

This is easier if it is a specific thing we are saving for: we know how much a new camera, a set of dance lessons or piece of music software costs. Once you know the price – that’s our goal.

If you’re saving for something bigger or more complex, like university living costs or a new piece of art you want to make, this is a bit more complicated. You will need to breakdown the core costs that make up the thing you are paying for. A great example is if you were saving to move to a new place.

You start by asking yourself: what are the essential things I will have to pay for?

This will give you a ‘bare bones’ list of what individual costs make up the overall cost of moving to a new place.

You then put these individual costs into a table and research to find out, roughly, how much it will cost.


RENT £450

BILLS (Internet, Electricity, Gas, Council Tax, Water) £100

FOOD £200




It’s always good to add a contingency, just in case. A contingency is a small amount of money you budget for in case something costs more than you thought it would. Maybe rent is more expensive than you thought or the equipment you ordered has a postage fee you didn’t plan for.

To work out your contingency let’s use this example:

Take your total goal amount = £1000

Divide it by 100 = £10 Times it by 5 = £50 This gives you your 5% contingency. Then add your 5% contingency to your original total = £1050

Our Target Amount is £1050.

STEP 2: Set up a new savings pot/account

Now we know how much we need to save, we need somewhere to save it. The trick here is saving it somewhere that we can access it easily, but not so easily that we are tempted to use it to buy a new Playstation game.

- Open up a new bank account or savings pot. Ideally, you should do this with a separate bank to your personal account to make it harder for you to take bits from it for trivial purchases.

- Change the name of the account to ‘New Camera Fund’ or whatever it is you are saving for rather than keeping it as a random account number. Psychologically, this will put another barrier between you and the money.

STEP 3: Create a Budget and Timeline

Yes, I know – the B word is back!

If you are a young person who is juggling work and education, finding a few thousand pounds to put in a savings pot isn’t something you can just… do! Setting a budget and timeline becomes crucial. It does mean you will need be stricter with yourself and your budget. But, it is also easier than you think.

For example, if your goal is £1050 and you have one year to reach it, then all you need is to save £21 a week for one year: £21 x 52 weeks = £1050

- Set a specific deadline date by which you want to have achieved your target goal. If you’re saving for a course, what date do they need payment by? If it’s for a piece of equipment, when would like to have it by? Don’t just say ASAP, be specific and mark it down on a calendar. You can then break your goal amount down into monthly and weekly goals (Target Amount / Weeks between now and your deadline).

- Think of small sacrifices you can make: walking instead of getting the bus or making lunches instead of spending money at the school canteen.

- If the weekly goal is too much then build up to it gradually. Using the earlier example: if £21 at the start is too difficult Start with £11 a week for 4 months, Then £21 a week for 4 months Then £31 a week for 4 months.

You still hit your goal in the same amount of time but you build up the amounts you pay in gradually.

- Treat it as a mandatory line in your budget like any other bill. You have to pay your bus fare. You have to pay for the food you buy You have to pay this savings fund.

STEP 4: Set up a Standing Order

Standing Orders are regular payments you can set up through your bank to happen on the same day every week or month for the same amount. Having a Standing Order every week keeps payments automatic, so you’re less to keep the money an extra week.

That’s it!

Need to make the money a little quicker? Here are some handy questions to ask yourself.

- What are the non-essential items in my life that I can take a break from?

McDonalds at the weekend, ice skating, entertainment, etc.

- Are there cheaper alternatives to anything I buy?

Store brand products, shopping at a cheaper supermarket or local market.

- When was the last time I contacted my mobile phone provider?

If it’s been awhile, it might be worth asking for a cheaper deal that matches your needs, especially if you have noticed you don’t use all the minutes, texts or data.

- Do I have a skill I can use to make a bit of money?

Speaking a foreign language, playing an instrument, being good at baking – if you know how to do it there will be somebody who wants to pay for it. Make a list of skills you have or things you can do and ask in your local area, local groups or online if anyone needs someone to do it.

- Will I be getting any extra cash in the near future?

Birthday money from your Nan or any money you were not expecting to have should go straight into your savings fund.

- Can I turn this into a game?

If you are the competitive sort, you could set up a game with a friend to see who can reach their savings goal first. Or smaller goals, like first to £200. Loser pays a fun forfeit!

Remember: building your savings fund is giving yourself a gift for the future. You are giving yourself a new piece of equipment, some classes or some peace of mind not having to worry about an expense. It is going to feel a bit rubbish at the start, but the joy you’ll feel when you see that number go up week by week is worth it!

Being good at saving is the first step to being good with money and financially responsible, and doing so will give you the freedom to do bigger things in your life or career that you couldn’t do otherwise.

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