How-to Guides » OLD GUIDE Build up your savings

Set yourself a target

28 tips on this task  |  Tweet

1. Setting a savings target right at the beginning will give you something to aim for and a better chance of achieving your goal. But make sure your target is realistic. Not too much, but more importantly not too little.

2. You should try to build up a savings pot of at least three months' salary, so you'll have enough money to cope if you lose your job or suffer some sort of emergency. In the current economic climate, with rising unemployment, this savings cushion should ideally cover you for at least six months.

3. Don't worry if that sounds like a lot of money to put away. Just save what you can afford even if it's only a small amount every month. You'll be surprised how quickly your emergency fund grows. Set up a direct debit or standing order into your savings account which collects the money from your current account the day after you get paid. That way, you can be sure you'll manage to save something every month.

4. Most importantly of all remember this is your emergency savings so don't be tempted to dip into it for other non-essential spending. For example, if you want to save some money towards a holiday, make sure you put it away in a separate account. It's important to keep your emergency fund for that purpose alone.

Compare savings accounts at lovemoney.com