This is another back to basics post. Just as important as knowing your expenses and spending habits is being able to answer the question: Why do you want save up? Do you want to buy a car? Travel around the world? Have your dream wedding? A decent pension that allows you to keep your lifestyle? A deposit for a mortgage? All of this?
There are thousands of reasons why you could want to save up.
Take a pen and paper and write down all of the things you need money for.
You can then categorise each goal in one of these 3 categories (with some examples)
timeframe | short term | medium term | long term |
within 1 year | 1-10 years | 10 years+ | |
goal | new mobile* | car | 3 month career break | pension | pay off mortgage |
funds needed | £500 | £1,000 | £7,000 | >£300,000 | £180,000 |
Now imagine every goal as a pot waiting to be filled up with money. Some are smaller, some bigger. But lots of little drops fill the bucket eventually (not to forget the magic of compound interest).
Every pot = one future savings account.
The timeframe will help you determine which account is best.
When you choose the right savings account for the goal, you need to know whether you want the money accessible right away or if you are willing to tie your money up on a fixed term, with comes usually at a better interest rate.
Reasons, why different accounts per goal matter
- You can automate transfers.
- You protect yourself from yourself. If you save up for a car into your car savings account, you are less likely to raid it for unnecessary expenses or a luxury item out of a mood.
- You can watch your progress towards your various goals.
- Build momentum. A growing account will be a positive reinforcement and the journey gets more fun.
- Hold yourself accountable – understand why you are not making progress and what you can do to change.
- You can prioritise better: Goals might change in importance over time, you can adapt the amount you pay into your accounts accordingly.
Don’t overdo it either, if you have a few smaller goals, like we have for children’s items (bicycle, helmet, next size up wardrobe), bundle it into one account “kid’s fund”, which has no set goal but which we aim to keep around a certain amount (£250).
Don’t be intimidated by seemingly unachievable numbers, write it all down. Without knowing your goals, it is hard to find the motivation to save.
Knowing your goals, you can now devise a plan with actions how to get there.

*Some might laugh about the “new mobile”. Someone offered me the advice of getting it now and paying off instalments. I would not buy it then, as it’s not mine, until paid off. It’s a debt. (Obviously if your washing machine breaks and you have no emergency funds, it might be your only option.)
Otherwise, save up for it and then buy it. I grew up with this wisdom and it kept me debt free my entire life, until I got a mortgage. But things… Don’t get in debt for things if you can avoid it.