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If you’ve got big plans for the future, whether it’s buying a home, a dream holiday. travelling the world or starting your own business, finding out how much money you could save in the coming years is great motivation to reaching your goal.
However much you decide to put aside, your future self will thank you if you stick to the plan. And there’s no time like the present to take control of your finances.
USE THIS EASY TOOL TO WORK OUT YOUR SMARTEST SAVING & SPENDING
1. Find out how much you could save for the future
Essential costs are things like rent/mortgage, utility bills, train fares and childcare. These are your fixed costs.
2. What your future savings could look like
These calculations do not include the interest your savings will earn you over time. Any pay rises or promotions will also help you increase your savings potential, as well as any opportunities to make extra money or reduce bills.
3. Your future savings budget breakdown*
4. Working out how to budget and save each month
The key to achieving your savings goals is to clear any debt first and then to save regularly!
Get into a savings habit and whatever you can afford to put away each month will soon add up over time. Your future self will thank you for it.
And remember FSCS protects your savings for free, from as little as £1 up to £85,000. Check your savings provider is FSCS protected.
*Your future savings budget breakdown is based on a 50/20/30 budgeting rule, which is commonly used to find out if and where you're spending too much. 50% of your monthly take home salary should in theory go towards your 'essential costs', 20% should go towards any savings or debt reduction, then 30% is for your 'flexible spending'. For those people spending over 50% on their essential costs, the tool will adjust your other budgets proportionally.
The key to budgeting is finding the right balance for your lifestyle and to make sure you save regularly. The amount you could save might surprise you!
Throughout your career, promotions, a pay rise or a brilliant new job will help you increase your savings potential. Interest rates could also rise and, hopefully, you’ll have other opportunities to reduce bills and make extra money.
Work out what’s coming in and going out each month. A budget planner app can highlight any unnecessary spending, helping you save more.
Start your savings journey
Once you’re ready to begin your savings journey, look at planning the next 5-10+ years in more detail.
Try not to pressure yourself: whatever you can afford to save regularly adds up over time.
Money Means has plenty of guides to help you get to grips with your money and future proof your finances, including:
- 10 ways to be better with money in 2017
- 5 ways to get a grip on your pension
- How to manage the cost of childcare
What is Money Means?
Money Means is a news and information series written by independent financial and consumer journalists and experts**. FSCS launched Money Means in 2016 to help give people clear and useful information about personal finance, to increase their understanding and confidence when dealing with money.
**THE VIEWS EXPRESSED IN MONEY MEANS ARE OF THE WRITERS AND NOT OF FSCS AND SHOULD NOT BE REGARDED AS ADVICE.