Have you set your saving & investment goals?

Having a clearly-defined savings or investment goal gives you something specific to aim for — a concrete carrot dangling in front of your nose, if you like.

But as well as being a great incentive, having something tangible to work towards also takes planning and commitment, especially during the rough times.

With this in mind, we’ve come up with a six-step guide, which we call the Be-Plan. To start it, you need to…

1. Be organised

Before doing anything, grab a pen and make a list of all your goals, large and small.

Obviously, this wish-list will vary depending on your age. For example, if you’re in your mid-20s, you may be more concerned about buying a car or home than retirement.

But don’t forget to factor in the future too — within 10 years you could have a mortgage, marriage and kids. You’d also be surprised how quickly the years fly by and retirement becomes more relevant.

So arrange your goals into different time categories:

    • Short-term goals (1 to 5 years) – e.g. car, home deposit, wedding
    • Medium-term goals (5 to 20 years) – e.g. pay off mortgage, child’s school fees
    • Long-term goals (20-plus years) – e.g. retirement, child’s wedding

If you’re young, you might not know what you want to do with your retirement but one thing’s for sure — you’ll need money to pay for it.

So when making your short-term list, you might decide to ask yourself if it could be shorter and the money invested for the future, which brings us to…

2. Be ruthless

By being ruthless, prioritising your goals and focusing only on the most vital, you’ll achieve your aims more efficiently.

So re-write your list in order of priority. Ask yourself if each goal is a must-have or a luxury — the latter should always be lower down than essentials like retirement.

Then ask yourself what your goal is, how much you’ll need for it and how long you have to reach it. Once you’ve worked that out…

3. Be realistic

There’s no point having a goal if it’s not practical and you can’t save or invest properly — you’ll only become disheartened.

Meet Penelope Wise (Penny Wise, geddit?) who’s 25 and earns £35,000 a year. The main priority from her list was saving £10,000 over two years for a deposit on a flat.

That meant she would have needed to put away around £400 a month in the tax-free ISA she’d chosen. But after calculating her monthly budget, Penny realised that was too much, so she’s now saving & investing for three years and putting by £270 a month instead.

Like Penny, it’s vital to do your sums. That way you can work out a realistic allowance and stick to it, while remembering to…

4. Be prepared

Your savings & investments are for one purpose and one purpose only — saving & investing. There’s no point dipping in and out of them every five minutes for unforeseen expenses. So add another goal to your list — emergencies. This could be a small amount set aside every month in a separate account for things like car repairs or vet fees.

Okay, so you know what your goal is and how much you’re going to put away each month to get it. So now you need to…

5. Be vigilant

It pays to shop around for your choice of savings & investment plan, whether it’s an easy-access savings account for a short-term goal, or a more long-term investment.

Once started, keep tabs on your investment by studying your monthly statements instead of just chucking them in a drawer. Internet banking also means that you’re just a mouse click away from seeing how near you are to your goal. And if there IS a major unforeseen calamity and you’re forced to raid your pot…

6. Be flexible

Don’t stress out — just work out how much you missed your monthly target by and re-plan. You can always extend your savings or investment term or find ways of economising for a while until you’ve replaced the lost cash…and are back on track for those goals.

The information provided in this article was accurate at the time of publishing and should be read in the context of the date it was published. Views in this article are those of the author alone and do not necessarily represent the view of Scottish Friendly. No advice has been provided by Scottish Friendly. If you are in any doubt as to whether a savings or investment plan is suitable for you, you should contact a financial adviser for advice. If you do not have a financial adviser, you can get details of local financial advisers by visiting www.unbiased.co.uk. Advisers may charge for providing such advice and should confirm any cost beforehand.