Setting savings goals

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Why have savings goals?

Having something to save for can provide you with a reason to make the most of your money. If you are saving for something you are genuinely excited about, saving for it will become a priority and you will be less likely to waste money on unnecessary things.

Can you think of anything you would like to save for?

Plan your saving

Imagine you have just booked a holiday which will cost £1,200 and needs to be fully paid off in 12 months time. If you are in the position to pay it off immediately, fantastic! If not, you may have to save.

To do this, you must first calculate how much needs to be paid off and when. You may have to pay in instalments, so check when each instalment is due and the amount. For this example, we will say the full amount is to be paid off in 12 months time.

The next step is to set up a savings account. You may already have a general savings account which you could pay into and use for the holiday. However, by setting up a specific savings pot you can easily track the savings for your holiday and not be tempted to use the money elsewhere.

Set up your savings account

Once you know how much you need to save and when it needs to be saved by, you can calculate how much you want to save monthly in order to reach your savings goal on time.

In this example, you would need to save £100 per month for the 12 month period to reach £1,200. You can then set up a standing order of £100 per month directly into the savings account and the money for your holiday will be building in the background.

Before you know it, you will be enjoying your holiday knowing that a little bit of planning helped the whole process much smoother.

  • The information provided in this article is for guidance and educational purposes only. Police Credit Union Ltd. does not offer regulated financial advice. Please seek independent financial advice.

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