Harriet Guevara, Chief of Staff at Nottingham Building Society shares her top strategies for building and sustaining savings habits.
Looking to improve your savings habits in 2025? While cutting out your morning latte or Netflix subscription might seem like an easy fix, there are more effective ways to build a strong financial foundation.
Back in 2020, the ‘Nation of Savers’ initiative was set in motion, with the aim of encouraging two million more people to save regularly before 2030. According to the UK Strategy for Financial Wellbeing, 11.1 million adults in the country are classed as inadequate savers, which equates to over half (56%) of all working-age adults and 61% of the total adult population.
The UK is a nation of individuals from all different backgrounds, circumstances, motivations, and ways of managing money. Whether you’re saving for an emergency fund, a big life event, or a comfortable retirement, these five practical tips can help you achieve your money-saving goals in 2025.
1. Build a safety net first
Before setting long-term savings goals, focus on creating an emergency fund. Aim to save enough to cover three to six months of essential expenses.
This fund acts as a financial cushion for unexpected events, such as job loss, medical emergencies, or car repairs. Start small by setting aside a portion of your monthly income and gradually work your way up to this target.
2. Follow the 50/30/20 rule
A proven budgeting method is the 50/30/20 rule:
- 50% of your income goes toward essentials like housing, food, and utilities.
- 30% is allocated to discretionary spending, such as hobbies, entertainment, and dining out.
- 20% is reserved for savings and debt repayment.
This framework helps you strike a balance between meeting current needs and securing your financial future.
3. Set clear savings goals
Having specific savings goals can keep you motivated and focused. Consider dividing your goals into three categories:
- Short-term (1–3 years): These might include saving for a holiday or a new car. Opt for a regular savings account with easy access.
- Medium-term (3–10 years): Examples include saving for a wedding or a house deposit. Look for savings accounts that offer competitive interest rates.
- Long-term (10+ years): Think about retirement savings. Pensions and ISAs are often great options for long-term financial growth.
4. Increase your monthly savings
To grow your savings, you’ll need to either reduce expenses, increase your income, or both. Here are some actionable strategies:
- Track your spending: Categorise expenses into “needs” (essentials) and “wants” (non-essentials) to identify areas where you can cut back.
- Create additional income streams: Side hustles or freelance work can provide extra funds to bolster your savings.
- Automate your savings: Set up a direct debit to transfer a portion of your income into a savings account as soon as you get paid.
- Request a raise: Don’t shy away from negotiating a higher salary if your performance warrants it.
- Pay off high-interest debt: Reducing debt can free up more money for savings over time.
5. Review and adjust regularly
Your financial situation will change over time, and so should your savings plan. Review your progress every few months and adjust as needed. Check if you’re getting the best interest rates on your accounts, and ensure your goals remain aligned with your priorities.
Consistency is key
There’s no one-size-fits-all solution to saving money. Whether you’re putting aside 5%, 10%, or 20% of your income, the key is to stay consistent. Start small, build momentum, and keep your eyes on your goals. For more practical money-saving tips, visit Nottingham Building Society website where there is a selection of helpful savings guides to help you start saving for what is important for you.