It's not always possible to save but it's something we should all aim for

Teenage boy at supermarket

The most financially savvy people save as much as they can. Having a pot or two of money for emergencies, holidays or the future can save a lot of difficulties and worry later on. The most efficient way of building savings is to put away a certain amount of money each month. In order to work out how much you can afford to save you need to write a budget and stick to it as much as possible.

It is often helpful to have a specific savings goal to work towards, such as driving lessons, a car, a holiday or new item of clothing. Once you have decided on your savings deadline, you can work out how much you need to save each week or month. You can use the savings calculator at the Money Advice Service to help you.

There are specific bank accounts for saving. These accounts traditionally pay interest, growing your savings each year.

The two types of interest rate are AER and APR. AER stands for the Annual Equivalent Rate and is used for savings. APR stands for the Annual Percentage Rate and is used for borrowing. The higher the rate of AER the more money will be added to your savings. For example, an account offering 5% interest will result in your savings growing more than an account offering 1% interest.

Additional resources

  • The traffic lights tool can be used to help you identify what you need to stop doing, keep doing, or start doing to help you better manage your money and start saving.
  • The Aspirations Ladder is designed to help you work towards a specific goal. Think of something you would like to save for in the future. It could be something big like a holiday or car, or small like a handbag or day trip with friends. Write your goal in the cloud at the top, and then think about the steps you need to take to get there.