Start a savings plan today in 3 easy steps

Black woman with saving piggy bank


A trip of a lifetime, buying a house, upgrading your car, university fees, planning for retirement – just some of the things we dream about but may seem out of reach. However, it may not be as unachievable as you think if you have a savings plan in place – and do it.

When daydreaming about your future, it may be easy to think that you need to get a savings plan in place but you need to actually do it. Don’t leave it on your list of things for the future.  There will always be a reason not to keep some money back, some kind of emergency that occurs, and then you’ll think “I’ll start saving next month”, which of course doesn’t happen!

Hi. I’m Anna Goodwin, your friendly finance mentor.  With over 30 years of experience, I know how important it is to start saving and the benefits of creating a savings plan.

1.Create a budget plan

Your first step to creating a savings plan is to create a budget plan so you know where you stand. This will help you in many ways:

  • Putting money aside each month
  • Giving you confidence that you can cover all of your expenditure
  • It’s motivating – small, regular amounts add up quickly

How to prepare a budget

  1. Write down the funds you have going out and coming in each month
  2. Work out what you spend each month – make sure you include everything
  3. Enter your spending into 3 categories:


  • Mortgage/rent
  • Council tax
  • Utilities
  • Insurance
  • Food
  • Childcare
  • Travel


  • Credit card repayments
  • Store card repayments
  • Loans
  • Regular savings (10%) – more about this later
  • Long-term savings (10%) – more about this later


  • Gym membership
  • Takeaways
  • Netflix subscription
  • Etc

4. Add all expenditure together and deduct from your income. Do this for each month. Start the budget with the balance per your bank statement.

5. Review your costs regularly and reduce them if possible.

There’s more about how to budget in this blog.

2. Cut costs

The best way to have some spare funds at the end of the month to go into your savings plan is to reduce your spending and cut your costs. There are many ways to do this:

  1. Check you’re not paying too much for costs such as telephone, insurance, and utilities by doing some research on alternative deals and providers.
  2. If you owe money on credit cards, then transfer your balance to a card which gives you 0% interest. More about getting out of debt in my blog.
  3. Organise a free overdraft, e.g. First Direct offers £250 free on its First Account.
  4. Make sure you’re claiming all tax reliefs, e.g. marriage allowance, rent a room relief, etc.
  5. Cancel any unnecessary direct debits – do you really need that monthly gin subscription?
  6. Use budgeting apps on your mobile phone to help you keep track of your spending.
  7. When shopping, don’t always buy the branded goods – consider buying the supermarket own brands
  8. Buy in bulk to benefit from savings, but only things you will use.
  9. Use any relevant shopping vouchers – keep them organised so they can be used before they are out of date.
  10. Check out the reduced aisle in supermarkets and buy products you will use before their use by date (there’s no benefit to buying reduced items that are out of date before you can use them and you have to throw them out).
  11. Order takeaways direct from the restaurant rather than using a delivery service such as Deliveroo or Just Eat.
  12. Use any relevant restaurant vouchers and special deal apps ­– but keep a check on how often you eat out.
  13. Take your own bottle to a restaurant if possible, but be aware of any corkage fees.
  14. Walk or cycle when possible – not only will it save you money but you will also get fitter!
  15. Recycle old clothes. Oxfam will give you a £5 M&S voucher (off a £35 spend on clothing, home and beauty in M&S stores) if you donate at least one item of M&S labelled clothing.
  16. Make do and mend by repairing things rather than throwing them away and buying new.
  17. Buy longer lasting beauty products and household cleaners.

3. Two parts to your Savings Plan

There are two types of savings you should be considering: Regular savings and Long-term savings.

Regular savings

Aim for 10% of your monthly income.

Use this for emergencies, such as car breakdown or boiler breakdown, or treats such as holidays or a new handbag.

Set up a monthly direct debit to leave your current account and go to your savings account each month.

Savings you don’t touch (Long-term savings)

This is an account for you to save money as an investment. Ideally, you will leave any interest incurred in this account so your money is continually making money. I know there isn’t much of an interest on savings accounts at present, but even the smallest amount helps.

Hopefully this has given you some tips about how to reduce costs and to start saving and how to make the best of your savings plan.  Have a clear idea of what you want from your savings and that will help you to stay on track.

Good luck!

Next month I will talk a bit more about improving cash flow and cutting costs.

Anna Goodwin @2021 All Rights Reserved.